Forced Liquidation
Definition of 'Forced Liquidation'An action taken by brokerage houses that offsets and closes all positions within delinquent customer accounts in order to reduce exposure. |
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Investopedia explains 'Forced Liquidation'Forced liquidations generally occur after warnings have been issued by the broker regarding the under-margin situation of an account. Should the account holder choose not to meet the margin requirements, the broker has the right to sell off the positions. |
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