# Liquidation

Liquidation is a situation where the value of borrowed funds has decreased by the current value of the collateral. The cost of borrowed funds includes a borrowing fee.

### Liquidation Price <a href="#liquidation-price" id="liquidation-price"></a>

Liquidation price is the price level at which your position will be forcibly closed due to insufficient collateral to cover potential losses.&#x20;

At the time of position liquidation, only the collateral for the current position is at risk. Funds in your account will not be affected.