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Common Reasons for Futures Liquidation

Common Reasons for Futures Liquidation

2023/07/24 09:32:40

1. What is Liquidation Criteria for Futures Positions


If the futures position risk ratio reaches 100%, indicating that your margin balance is below the maintenance margin, position reduction or liquidation will be triggered.


2. What is Est. Liquidation Price


The estimated liquidation price refers to the estimated price at which a futures position triggers liquidation when the position risk ratio reaches 100%. This price is provided for users as reference only. In the cross margin mode, the liquidation price remains the same for both long and short positions within a specific symbol.

 

3. Why is the Liquidation Price Different from the Est. Liquidation Price


The estimated liquidation price is only for reference. Given that the market prices are constantly fluctuating, liquidation orders will be executed at bankruptcy prices. As a result, the executed price during liquidation may deviate from the estimated liquidation price. Please note that a significant deviation between the executed and the estimated liquidation prices may be caused by market volatility.


4. Why My Positions are Liquidated Before the Last Price Reaches the Est. Liquidation Price


The platform uses the mark price for PnL calculation and position liquidation. It is worth noting that the mark price is calculated based on the spot index price and the basis difference, which will deviate from the last price.


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