what is liquidation margin 
buying securities on margin allows a trader to acquire more shares than can be purchased on a cash only basis if the stock price goes up earnings are often higher because an investor holds more shares however if the stock price falls traders may lose more than their initial investment the liquidation margin is the value of all of the positions in a margin account including cash deposits and the market value of its open long and short positions if a trader allows their liquidation margin to become too low they may be faced with margin calls from their brokers and the broker may liquidate those positions 1understanding liquidation marginsmargin trading is the practice of borrowing money from a broker to execute leveraged transactions such as buying securities leveraged trading involves borrowing the securities themselves from the broker s inventory when engaging in short selling the trader then sells those securities and seeks to repurchase them at a lower price in the future 