When Forced Settlements Occur, Exchanges Rush to Cover Positions
Forced settlement is a market dynamic often seen in derivatives, futures, or cryptocurrency trading, particularly during crises involving short squeezes, liquidations, or settlement failures. In normal trading, participants (buyers and sellers) are price-sensitive—they seek good deals and avoid overpaying. However, when “forced settlements” occur, certain parties become price-insensitive buyers. They must acquire the asset like […]
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