# Liquidation Trigger

<mark style="color:$info;">Liquidation occurs when:</mark>

> <mark style="color:yellow;">`Underlying price ≥ liquidation price (YES)`</mark>
>
> <mark style="color:yellow;">`Underlying price ≤ liquidation price (NO)`</mark>

<mark style="color:$info;">Once triggered:</mark>

1. <mark style="color:$info;">The position is closed.</mark>
2. <mark style="color:$info;">The hedge is unwound.</mark>
3. <mark style="color:$info;">Remaining collateral is credited to the user.</mark>
4. <mark style="color:$info;">The terminal updates the user's account immediately.</mark>

<mark style="color:$info;">There are</mark> **no hidden conditions or discretionary rules**.

<mark style="color:$info;">Front-ends receive a continuous feed of:</mark>

* <mark style="color:$info;">current liquidation price,</mark>
* <mark style="color:$info;">current buffer (distance to liquidation),</mark>
* <mark style="color:$info;">recommended collateral top-ups.</mark>

<mark style="color:$info;">When the buffer drops below thresholds:</mark>

* **Warning 1: Margin Call**

  <mark style="color:$info;">The front-end prompts the user to either add collateral or reduce exposure.</mark>
* **Warning 2: Imminent Liquidation**

  <mark style="color:$info;">Displayed when price is within a narrow band of the liquidation price.</mark>

<mark style="color:$info;">Once liquidation is triggered:</mark>

1. <mark style="color:$info;">Multiply executes the hedge unwind within configured slippage bounds.</mark>
2. <mark style="color:$info;">Synthetic position is marked closed at the liquidation price.</mark>
3. <mark style="color:$info;">Any remaining collateral is returned.</mark>
4. <mark style="color:$info;">The front-end reflects final PnL.</mark>

<mark style="color:$info;">If liquidity is insufficient for immediate unwind, Multiply enters a protected unwind mode and pauses new exposure until safe execution is possible.</mark>