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Explanation of Maintenance Margin and Forced Liquidation

To ensure market stability and user trading security, this platform provides the following explanation of maintenance margin and forced liquidation rules. Please read carefully and manage your positions responsibly.

1. What is Maintenance Margin?

Maintenance margin is the minimum margin that users must maintain while holding a position. If the account margin falls below this level, forced liquidation may be triggered.

Calculation Method (USDT-Margined Contracts as an Example):

  • Isolated Margin Mode: Only affects the margin of the specific position
    • Long: Liquidation Price = (Position Value – (Position Margin – Maintenance Margin – Fees)) ÷ Position Size
    • Short: Liquidation Price = (Position Value + (Position Margin – Maintenance Margin – Fees)) ÷ Position Size
  • Cross Margin Mode: Affects the entire contract account
    • Long: Liquidation Price = (Position Value – (Account Balance – Maintenance Margin – Fees)) ÷ Position Size
    • Short: Liquidation Price = (Position Value + (Account Balance – Maintenance Margin – Fees)) ÷ Position Size

2. What is Forced Liquidation?

When the available margin in an account falls below the maintenance margin requirement, the system will automatically trigger forced liquidation to prevent account insolvency.

  • Long: Triggered when the mark price falls below the liquidation price
  • Short: Triggered when the mark price rises above the liquidation price

Key Factors:

  • Maintenance Margin Rate: Varies depending on position size and leverage
  • Market Volatility: Extreme volatility may cause liquidation prices to deviate

3. How to Reduce Forced Liquidation Risk?

  1. Monitor Market Volatility: Pay close attention to market changes, especially during high volatility.
  2. Allocate Margin Wisely: Avoid keeping margin levels too low and maintain sufficient funds.
  3. Use Risk Management Tools: Apply stop-losses, use isolated margin, or adjust leverage to lower risks.

4. Special Notes

  • Maintenance margin is not refunded after liquidation, as it is used to prevent account deficits.
  • In extreme market conditions, liquidation prices may deviate. Users should manage risk carefully.
  • If you have any questions, please contact our support team for assistance.

Tebbit Team