Forced Liquidation Explanation

The margin rate is an indicator used to measure the risk of assets securing your position.

 

In order to prevent large positions from liquidation when the impact on market liquidity, resulting in significant losses, we adopt a tiered reduction mechanism. Each tier corresponds to a different maintenance margin rate. When the margin rate ≤ the maintenance margin rate, a reduction will occur, decreasing the position size to the level corresponding to the next tier.

 

When a position reaches the liquidation condition, the system will automatically execute the following measures to release available margin in order to avoid liquidation:

If, after executing the above steps, the user’s margin rate is still lower than the current tier’s maintenance margin rate, a forced position reduction will be carried out.

 

If the margin rate remains ≤ the maintenance margin rate, the system will forcibly reduce the position to the net position limit of the next tier, so that the margin rate becomes greater than the maintenance margin rate;

If the system calculates a forced reduction down to tier 1 and the margin rate is still ≤ the maintenance margin ratio, then all positions will be fully liquidated.

When liquidation is triggered, users will not be able to perform any operations related to that futures.

 

Once liquidation is triggered, your position will be forcibly taken over and handled by the system. No closing fee will be charged to the user.
 

Cross Margin Mode

Margin Rate=(Futures Account Balance + Unrealized PnL of all cross margin futures) ÷ (Total Position Value of all cross margin futures) × 100%

 

Isolated Margin Mode

Margin Rate = (Position Margin + Position Unrealized PnL) ÷ Position Value × 100%

 

Long Position Unrealized PnL = (Current Mark Price – Entry Price) × Position Size

Short Position Unrealized PnL = (Entry Price – Current Mark Price) × Position Size

Position Value = Current Mark Price × Position Size

 

More info about maintenance margin rate: https://futures.voox.com/zh_TW/futuresData

 

Liquidation is triggered when the margin rate ≤ the maintenance margin rate. Therefore, we calculate a price at which the margin rate equals the maintenance margin rate, and use it as the estimated liquidation price.

Please note: liquidation is not triggered when the mark price simply reaches the liquidation price. The estimated liquidation price is provided only as a reference for users to manage position risk. It will change continuously depending on factors such as account balance.