# Mitigating Liquidation Risk

To minimize the risk of liquidation when using leveraged trading platforms, users can employ the following strategies:

1. Low or No Leverage: Opt for trading strategies that involve little to no leverage to reduce the likelihood of liquidation.
2. Delta-Neutral and Yield Arbitrage: Engage in trading strategies that aim to maintain a neutral exposure to price movements, such as delta-neutral positions and yield arbitrage opportunities.
3. Position Health Monitoring: Utilize the Position Health indicator provided in the user interface to closely monitor the health of open positions and their proximity to the liquidation threshold.

**Monitoring Liquidation Risk**

The Position Health indicator allows users to track how close their positions are to the liquidation threshold. These thresholds are strategically set to protect the protocol and lenders from potential bad debt. Make sure to maintain the margin to ensure liquidators have sufficient room to cover loan repayments and liquidate assets profitably.

**Proactive Position Management**

To maximize the value of their investments, users should proactively manage their positions. It is advisable to consider closing positions before reaching the liquidation threshold to minimize losses and retain as much value as possible.

By implementing these risk management strategies and closely monitoring position health, users can effectively navigate the risks associated with leveraged trading and make informed decisions to protect their investments.


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