What is Forced Liquidation?

Forced Liquidation refers to the process by which the system forcibly closes a position when its risk exceeds the acceptable threshold, in order to prevent the account from incurring a negative balance (bankruptcy risk).

The liquidation trigger is governed by two mechanisms working in tandem: the Margin Constraint Mechanism and the Mark Price Trigger Mechanism.

1. Margin Constraint Mechanism

To maintain a position, users must maintain Position Margin at or above the required Maintenance Margin.

When the Position Margin falls below the Maintenance Margin requirement, the system will liquidate the position.

🔗 Learn more: Margin Terms >>

2. CoinEx Liquidation Trigger Mechanism

CoinEx adopts a Mark Price mechanism for liquidation calculation. Liquidation is triggered only under the following conditions:

• When the Mark Price falls below the Liquidation Price (Long positions)
• When the Mark Price rises above the Liquidation Price (Short positions)

This mechanism effectively reduces the risk of unwarranted

liquidation caused by low market liquidity or extreme price fluctuations (such as flash wicks or price manipulation).

🔗 Learn more: What Is Mark Price? >>

3. Liquidation Execution Mechanism

If liquidation occurs:

• The system will take over the position and close it at the Mark Price.
• The system will cancel all pending orders under the same margin asset, including Take-Profit/Stop-Loss orders, Limit orders, Stop-Limit orders, and Stop-Market orders, to prevent further loss exposure.

4. Differences Between Margin Modes

(1) Isolated Margin Mode: Each position carries its own independent margin, so liquidation is contained to that position alone.

(2) Cross Margin Mode: All positions under the same margin asset share the same margin pool. When the margin is insufficient, multiple positions may be affected.

What Is Liquidation Price?

1. Definition

The Liquidation Price is the trigger price at which a position will be forcefully liquidated.

When:

• The Mark Price falls below the Liquidation Price (Long positions)
• The Mark Price rises above the Liquidation Price (Short positions)

The system will initiate the liquidation process.

🔗 Learn more:
How to Calculate Liquidation Price for USDⓈ-Margined Contracts >>

How to Calculate Liquidation Price for Coin-Margined Contracts >>

2. When Is It Recalculated?

The system will recalculate the Liquidation Price when any of the following actions occur:

• Isolated Margin Mode: adding to a position, closing a position, adding margin, reducing margin, or adjusting leverage
• Cross Margin Mode: adding to a position, closing a position, or placing a new open order (which reduces available margin)

3. Notes

(1) If a funding fee payment reduces the available margin, the Liquidation Price will change accordingly.

(2) When the account margin is sufficient, the theoretical Liquidation Price for a long position may be computed to 0 or below. In this case, it will be displayed as 0.

(3) The Liquidation Price is a theoretical value. The actual execution price may vary depending on market liquidity at the time of liquidation.

Liquidation Alert

CoinEx uses the Risk Ratio to quantitatively assess the liquidation risk of a position.

1. Risk Warning Rules

• When the Risk Ratio ≤ 3%, the system will send a liquidation warning notification via email and push notification. Please monitor these alerts to manage risk properly.
• The smaller the Risk Ratio (the closer it is to 0%), the closer the position is to liquidation.
• When the Risk Ratio = 0%, the liquidation process will be triggered.

2. Calculation

Risk Ratio = (Position Margin − Maintenance Margin) / Position Value × 100%

Where:

• Maintenance Margin = Position Value × Maintenance Margin Rate
• Position Value = Mark Price × Position Size
• The Maintenance Margin Rate depends on the user’s current position size. Different contracts and position tiers correspond to different Maintenance Margin Rates.
  • For details, please refer to the Position Level Table.

Risk Reminder

During extreme market conditions, such as rapid price fluctuations or sharp declines in liquidity:

• Liquidation may be triggered within a short period of time.
• Highly leveraged positions (e.g., 50x or 100x) may be liquidated on even minor price movements.
• Under Cross Margin Mode, multiple positions may be affected simultaneously.

It is advised to manage leverage prudently, monitor liquidation warnings closely, and maintain sufficient margin to reduce liquidation risk.