# Liquidation

Liquidation can be triggered by the following:

* Market price hitting the liquidation price (See [this page](https://docs.moonlander.trade/how-to-use/trading/liquidation) for more information)
* Having insufficient collateral to cover fees

When either situation occurs, your position will be closed automatically. Collateral will be used to pay off the losses and sent to the $MLP pool as a liquidation fee.