A trader goes short a call option with a mark price of $100, a liquidation price of $120 and a bankruptcy price of $125. The trader is liquidated when the mark price reaches the liquidation price ($120). The trader is forced to buy back the option at a premium, which is the bankruptcy price ($125) from the liquidator. The liquidator at this stage is short the option at $125. The liquidator can then buy back the option at the mark price ($120). If the order is filled at $120, then the liquidator has effectively sold the call option at $125 and bought it back at $120, generating a $5 premium.