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 at which forced liquidation starts. 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 positions or over it for short positions.
Calculation
1. Long Position
Liquidation Price = Settlement Price * (1 - Liquidation Margin Rate) / (1 - Maintenance Margin Rate)
Bankruptcy Price = Settlement Price * (1 - Liquidation Margin Rate)
2. Short Position
Liquidation Price = Settlement Price * (1 + Liquidation Margin Rate) / (1 + Maintenance Margin Rate)
Bankruptcy Price = Settlement Price * (1 + Liquidation Margin Rate)
3. Isolated Margin
Liquidation Margin Rate = (Position Margin - Unrealized PNL) / Settlement Value
4. Cross Margin
Liquidation Margin Rate = (Available Balance + Position Margin - Unrealized PNL) / Settlement Value
Settlement Value = Position Amount * Settlement Price
Please refer to What's Settlement Price for how to calculate settlement price when Pyramiding Auto-Settlement is enabled.
For Maintenance Margin Rate, please refer to Introduction to Linear Contract Leverage and Margin.
The liquidation price uses the same unit as the average opening price.
Data Update
When any of the following operations are performed, the forced liquidation price will be recalculated.
Cross Margin: Add position, close position, new order to add position (For it will reduce the available balance)
Isolated Margin: Add position, close position, margin call, reduce margin, adjust leverage
Note: If the funding fees deduction lowers the margin, the forced liquidation price will also change.