Liquidation

The process of closing out positions, often involuntarily, by converting assets to cash. In margin trading, a broker will liquidate a trader's holdings if the account equity falls below the maintenance margin requirement. In crypto markets, liquidation cascades -- where forced selling triggers further price drops and more liquidations -- have wiped out billions of dollars in leveraged positions during sharp selloffs. In corporate finance, liquidation refers to winding down a company and distributing its remaining assets to creditors and shareholders.