How To Calculate Liquidation Price For Linear Contract

In Futures trading, a percentage of position value needs to be reserved to keep your positions open, which is known as the Maintenance Margin. If you cannot fulfill your maintenance requirements, your position will be liquidated.

Liquidation Price

Liquidation Price refers to the trigger price when the position is forced liquidated. Fair Price Marking is adopted on CoinEx to avoid liquidations due to illiquid markets or manipulation, and the liquidation only occurs when the fair price is under the liquidation price for long or over it for short.

Calculation

(Long Position) Liquidation Price = Avg. Open Price * (1 - Margin Ratio + Maintenance Margin Rate)

(Short Position) Liquidation Price = Avg. Open Price * (1 + Margin Ratio - Maintenance margin rate)

Among them:

Cross Margin Rate = (Available Balance + Position Margin - Unrealized PNL) / Avg. Open

PriceIsolated Isolated Margin Ratio = (Position Margin - Unrealized PNL) / Avg. Open Price

Maintenance Margin Rate please refer to Linear Contract - Leverage and Margin Description.

The liquidation price unit is the same as the average opening price.

Data Update

When any of the following operations are performed, the forced liquidation price will be recalculated.

(Cross) Add position, close position, new order to add position (For it will reduce the available balance)

(Isolated) Add position, close position, margin call, reduce margin, adjust leverage