Liquidation Mechanisms & Margin Call Notifications

At Multitude, we prioritize user safety and financial security. To ensure the stability of our platform and protect users from excessive risk, we have implemented robust liquidation mechanisms and margin call notifications, following industry-standard guidelines.

When a user's margin balance falls below the maintenance margin requirement, a margin call will be triggered. Our platform will send real-time notifications via email and in-app alerts, informing the user of the need to add more funds or close some positions to restore their margin balance. This early warning system allows users to take prompt action, minimizing potential losses and mitigating the risk of forced liquidation.

• User account balance: $10,000

• Leveraged position: $20,000

• Initial margin requirement: 50% (equals $10,000)

• Market moves against user, equity falls to $8,000 (40%)

• Maintenance margin requirement: 30% (equals $6,000)

• Equity still above maintenance margin: No margin call triggered

• User receives platform/device alert to make them aware margin health has fallen

• Equity falls further to $5,000

• Another alert is sent to user

• Maintenance margin requirement breached: Margin call triggered

If a user fails to take corrective action and their margin balance continues to decline, our platform will initiate a forced liquidation process to protect the lender's capital. This process involves automatically closing the user's positions, starting with the riskiest assets and continuing until the margin balance is restored to the required level. Forced liquidation ensures that the borrowed funds are repaid while minimizing the impact on the user's remaining portfolio.

To further enhance the user experience and promote responsible trading, Multitude will offer educational resources for users affected by margin calls, together with prompts designed to caution any users against 'chasing losses'.