Bankruptcy Price
Bankruptcy price is a theoretical price level used in some leveraged trading systems at which the margin allocated to a position would be exhausted under the platform's calculation. It is distinct from the liquidation price.
Why it matters to you
A platform generally wants to intervene before losses move beyond the collateral available to support a position. This is one reason the liquidation price and bankruptcy price are not necessarily the same. Understanding the distinction makes the purpose of liquidation systems much clearer.
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