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by JumpCrisscross
2915 days ago
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> When a collateralized position falls below the 150% (or whatever) mark, that position gets automatically liquidated and auctioned off to pay for the debt The same thing happens with banks. It turns into a run when this forced liquidation drives prices down further which in turn fuels further redemption requests. It’s very possible to start the day 150% capitalised and end 20% because you sold 10% which tanked the market. |
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