What is liquidation?Liquidation
When your margin can no longer cover your losses, the system forcibly closes your position.
Animation · liquidation
Learn “liquidation” in an animated lesson
- Arbitrage StrategiesFunding Rate Arbitrage: Risk-Free on the Surface
Buy spot and short an equal amount of perpetual futures: price moves cancel out and you just collect the funding rate. Is it really risk-free?
- Crypto BasicsPerpetual Futures and Funding Rates
Contracts with no expiry date use a "funding rate" to stay close to spot: longs and shorts regularly pay each other a fee.
Related terms
See how “liquidation” works for yourself with an animation you can drag and play.
Go to “Funding Rate Arbitrage: Risk-Free on the Surface”