> ## Documentation Index
> Fetch the complete documentation index at: https://docs.leap.trade/llms.txt
> Use this file to discover all available pages before exploring further.

# Liquidation & Risk

> Understand what liquidation means, why it happens, and the controls that can reduce the chance of reaching it.

A leveraged position can be liquidated when the account no longer has enough equity to meet the maintenance-margin requirement for that exposure.

In plain language: if the market moves far enough against a leveraged position and the remaining collateral is no longer sufficient, the system can forcibly reduce or close exposure.

## Why leverage matters

Higher leverage generally means you commit less initial margin for the same position value.

That also means there is less buffer between your entry and a margin problem.

A trader can therefore be right about the longer-term direction and still get liquidated during a shorter move against the position.

## Cross margin changes the account-level picture

With cross margin, collateral is shared across cross-margin positions.

That means liquidation risk is not always about one position in isolation. Unrealized P\&L and margin usage elsewhere in the account can change the buffer available.

## Mark price matters

Leap's perpetual trading is built on Hyperliquid infrastructure.

Hyperliquid uses **mark price** for margining and liquidation rather than relying only on the latest traded price. This is why the Pro interface shows mark price separately from other market prices.

## Ways to reduce liquidation risk

No control removes risk completely, but you can reduce it by:

* using a smaller position
* using less leverage
* keeping more available collateral
* setting a stop before the liquidation area
* avoiding several highly correlated leveraged positions at once
* reducing exposure during extreme volatility

## Liquidation is not a stop loss

A stop loss is an order you choose as part of your risk plan.

Liquidation is the platform's risk process when required margin is no longer maintained.

If liquidation is the first planned exit, you have left the account with very little room to manage the trade yourself.

> **Risk:**
> Estimated liquidation information can change as account equity, funding, position size, and other cross-margin positions change. Monitor the live account rather than relying on a number you saw when the position was first opened.