If a position’s losses become too large relative to its collateral, Roxom’s liquidation engine will intervene to close the position and protect the account from going negative. When an account’s Margin Ratio reaches 100% (meaning account equity equals the maintenance margin requirement for the position), that position is flagged for liquidation. In simpler terms, the account has no more free margin – any further loss would start eating into collateral it doesn’t have. At this point, a liquidation sequence is initiated to close the position before the account balance goes below zero.