# What are Liquidations?

When a trader opens a leveraged position (futures, perpetual contracts, leveraged trade, margin etc.) there is always a liquidation point. This is the price point where a position gets liquidated on an exchange if the trade moves against their plan. In such a scenario a trade is closed automatically by market order (or gradually deleveraged when coming close to the price) by the exchange to prevent losses for the exchange and higher losses for the trader. This price point can be approximately visualized on the liquidation heatmap from Liquidity Hunts.