Purpose
This guide explains when forced liquidation can happen, how Margin Level is calculated, which positions are closed first, and what members should check after liquidation.
Key Concepts
- Forced liquidation is a system close-out triggered by account-level margin risk.
- The main trigger is Margin Level.
- Current policy basis: forced liquidation starts when Margin Level is 50% or lower.
- The system closes positions using market-style bid/ask prices.
- If multiple positions are open, the position with the largest unrealized loss is closed first.
Liquidation Trigger
Margin Level is calculated as:
margin_level_percent = account_equity_usdt / used_margin_usdt * 100
Forced liquidation condition:
trigger_liquidation = margin_level_percent <= 50
Equivalent:
trigger_liquidation = account_equity_usdt <= used_margin_usdt * 0.5
Example
Equity = 240 USDT Used Margin = 500 USDT Margin Level = 240 / 500 * 100 = 48%
Because 48% is below the 50% stop-out level, forced liquidation can start.
Step-by-Step User Flow
- The system recalculates account Equity, Used Margin, and Margin Level.
- If Margin Level is 50% or lower, liquidation starts.
- Open positions are reviewed using current bid/ask and FX snapshots.
- The position with the largest unrealized loss is selected first.
- The selected position is closed at market-style bid/ask pricing.
- Realized PnL, fees, swap, and any liquidation-related fee are reflected.
- Account metrics are recalculated.
- The process can repeat until Margin Level recovers above the required level.
Execution Price Basis
- Long position liquidation uses the bid side.
- Short position liquidation uses the ask side.
- Liquidation may include additional slippage based on market and risk policy.
Long liquidation close price = current_bid - liquidation_slippage Short liquidation close price = current_ask + liquidation_slippage
Cautions and Limitations
- There is no single fixed liquidation price for an account with multiple positions.
- Estimated liquidation price is only a reference. Actual liquidation is based on account-level Margin Level.
- Swap, fees, spread, and FX movement can reduce Equity even if the market price does not move much.
- Hedge positions are not excluded from liquidation risk.
- During market close or quote unavailability, system handling can follow separate close-only, deferred, or risk-close policies.
FAQ
Is forced liquidation based on Mark Price?
No. In this CFD model, forced liquidation is based on account Margin Level and current bid/ask valuation.
Why was only one position liquidated?
The system can close positions one by one and stop if Margin Level recovers.
Which position is liquidated first?
Current policy basis: the position with the largest unrealized loss is selected first.
Where can I check a forced liquidation record?
Check Completed orders. Forced liquidation should be shown as a system close-out with relevant margin and PnL information.