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Support CenterCommon problemFAQ for Liquidation in Futures Contracts
FAQ for Liquidation in Futures Contracts
2022/03/04 20:23:17

1. What is the Estimated Liquidation Price?

U-Futures contract is a contract that guarantees position.Traders need to keep a certain percentage of its fund as a maintenance margin. If user's margin is lower than the maintenance margin, it will trigger the auto deleveraging system or liquidation. Both long and short positions of the same contract share the same liquidation price in cross margin mode.

For example, if your position value is 10,000 USDT with 0.5% of maintenance margin rate which means that you need 50 USDT as maintenance margin. When your maintenance margin in your account is lower than 50 USDT, which the rate of risk is 100%, it will trigger liquidation.

The 100% Risk Rate  = Maintenance Margin (50 USDT) / Margin (50 USDT) X 100%

2. Why is the actual liquidation price different from the Estimated Liquidation Price?

The estimated liquidation price is only for reference. Due to the volatile price in the market, the system will place the order by the bankruptcy price to liquidate. Therefore, there will be a difference between the actual liquidation price and the estimated liquidation price. After filling, if the actual liquidation price and estimated liquidation price have big differences, it might be due to the volatility of the market.

3. Why is it liquidated before the last filled price doesn’t match the estimated liquidation price?

Our platform calculates PNL and liquidation using mark price. Mark price is based on spot index and basis calculation. Therefore, the last filled price may differ from mark price. 

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