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Support CenterContractsFAQ for Liquidation in Futures Contracts
FAQ for Liquidation in Futures Contracts
2022/05/24 18:02:45

1. What is the Estimated Liquidation Price?


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


For example, if your position value is 10,000 USDT with 0.5% of the maintenance margin rate, it means 50 USDT needs to be used as maintenance margin. When your maintenance margin in your account is lower than 50 USDT, the rate of risk reaches 100%, and liquidation will be triggered.


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 for reference only. Due to the volatile price in the market, the system will place the order by the bankruptcy liquidation price. 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 appear to be very divergent, it might be caused by the volatility of the market.


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


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


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