Forced Liquidation
An action taken by brokerage houses that offsets and closes all positions within delinquent customer accounts in order to reduce exposure. Investopedia Says:
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. Related Terms:
House Call
Initial Margin
Margin
Margin Account
Margin Call
Margin Debt
Minimum Margin |