Basics and risks
Margin and liquidation: the risks behind the terms
What initial and maintenance margin are, how leverage relates to the liquidation threshold and why, in a peer-to-peer model, one side's loss can become bad debt for the other.
Section
Core concepts and risks
Funding, margin, liquidation, costs and classes of risk — mechanisms explained without trading recommendations.
Many crypto derivatives terms sound technical but describe simple things: who pays whom, how much collateral must be held and what happens when it runs short. We explain these mechanisms with hypothetical examples and show the risks behind them.
Nothing in this section is investment advice. We do not tune trade parameters or explain how to profit from them — only how the mechanisms work and where their limits are.
Editors’ selection
Where to start, in the suggested reading order.
