Intraday Liquidation

Intraday liquidation refers to the process of closing out positions during the trading day when a participant's collateral falls below a critical threshold. Unlike end-of-day settlements, intraday liquidation is a reactive measure to extreme price volatility or sudden market shifts.

By acting immediately, the clearinghouse prevents a loss from growing beyond the participant's ability to pay. This is particularly important in the crypto market, where volatility can occur at any time, day or night.

Automated liquidation engines monitor these levels in real-time, executing trades to close positions and rebalance the system before a default can occur.