Your broker closing positions for you because equity fell below maintenance requirements, at prices and times you do not choose.
Forced liquidation is what happens when risk control is delegated to someone whose only objective is protecting their own loan. Positions are closed in whatever order the risk engine prefers, often the most liquid ones - which may be your hedges.
The sequence is brutally efficient: a market drop cuts equity, the drop also raises maintenance-margin requirements as volatility rises, and the resulting gap between equity and requirement is closed by selling into the same falling market. In futures and crypto this runs automatically, in seconds, with no call.
Never operate close to the line. A margin-cushion of 40-50% above requirement is not conservatism, it is the difference between choosing your exits and having them chosen. See margin-call and free-margin.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Margin and leverage. A $5,000 deposit can control a $100,000 position, which is 20:1 leverage. Because the loss is measured on the full $100,000, a 2.5% move against you halves the deposit and brings a margin call, and a 5% move uses all of it.Buying a call: payoff at expiry. A 105-strike call bought for 3 loses that whole 3 if the price finishes at or below 105, breaks even at 108, then gains a dollar for every dollar higher. The loss is capped at the premium; the upside is not capped.
Educational only, not advice. Spotted an error? Post in Site Feedback.