Liquidation Level

In forex trading, the specific value of a trader's account below which the liquidation of the trader's positions is automatically triggered and executed at the best available exchange rate at the time. The liquidation level is expressed as a percentage value of assets. If a forex trader's positions go against him or her, his or her account will eventually reach the liquidation level, unless the trader contributes further margin to top up his or her account.

Forex trading makes heavy use of leverage; therefore, the forex dealer holding an account for a trader takes on the risk that the trader's positions will lose money and that the trader will be unable to repay the borrowed funds used to make the forex trades. As such, a specified liquidation level, which the trader agrees to when opening his or her account, fixes the minimum margin (expressed as a percentage) that the forex dealer will tolerate before automatically liquidating the trader's assets to avoid the possibility of default.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Liquidation Margin — refers to the value of all of the equity positions in a margin account. If an investor or trader holds a long position, the liquidation margin is equal to what the investor or trader would retain if the position was closed. If an investor or… …   Investment dictionary

  • sell out — liquidation of a margin account after a customer has failed to bring an account to a required level by producing additional equity after a margin call. Bloomberg Financial Dictionary The selling of securities by a broker when a customer fails to… …   Financial and business terms

  • Net capital rule — The uniform net capital rule is a rule created by the U.S. Securities and Exchange Commission ( SEC ) in 1975 to regulate directly the ability of broker dealers to meet their financial obligations to customers and other creditors.[1] Broker… …   Wikipedia

  • POLAND — POLAND, republic in E. Central Europe; the kingdom of Poland and the grand duchy of Lithuania united formally (Poland Lithuania) in 1569. This article is arranged according to the following outline: the early settlements jewish legal status… …   Encyclopedia of Judaism

  • RUSSIA — RUSSIA, former empire in Eastern Europe; from 1918 the Russian Soviet Federative Socialist Republic (R.S.F.S.R.), from 1923 the Union of Soviet Socialist Republics (U.S.S.R.); from 1990 the Russian Federation. Until 1772 ORIGINS The penetration… …   Encyclopedia of Judaism

  • Dodd–Frank Wall Street Reform and Consumer Protection Act — Full title An Act to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end too big to fail , to protect the American taxpayer by ending bailouts, to protect consumers… …   Wikipedia

  • ANTISEMITISM — ANTISEMITISM, a term coined in 1879, from the Greek ἁντί = anti, and Σημ = Semite by the German agitator wilhelm marr to designate the then current anti Jewish campaigns in Europe. Antisemitism soon came into general use as a term denoting all… …   Encyclopedia of Judaism

  • EDUCATION, JEWISH — This entry is arranged according to the following outline. Bibliography at the end of a section is indicated by (†). in the biblical period the nature of the sources historical survey the patriarchal period and the settlement the kingdom the… …   Encyclopedia of Judaism

  • 2007–08 Football Conference — Contents 1 Introduction 2 Overview 3 Conference National, Final League Table[1] [2] 4 Football Conference National Results[3] …   Wikipedia

  • business finance — Raising and managing of funds by business organizations. Such activities are usually the concern of senior managers, who must use financial forecasting to develop a long term plan for the firm. Shorter term budgets are then devised to meet the… …   Universalium

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.