Whenever you buy or sell shares you have to cover your potential losses. Tradesports does this by freezing the maximum amount you can lose whenever you make a trade. These frozen funds cannot then be used to fund other trades. If you don't have enough available cash in your account to cover this potential loss, then you can't make the trade.
By doing this your potential losses are always covered, which means the profits of those who you have traded with are always assured. There is no way you can default on your losses because we freeze the money required to cover your loss when you make the trade. And if you can't cover your loss then you can make the trade in the first place.
If you win the funds frozen to cover your potential loss are unfrozen and any profits made from your winning position are credited to your account. If you lose, the frozen funds are debited from your account balance as a loss.