## What is forced liquidation?

In order to maintain a position, investors must hold a certain percentage of the position value as a margin, that is, a maintenance margin.

When your position margin cannot meet the maintenance margin requirements, the contract will be forced to close.

CoinEx uses a reasonable price marking method to avoid forced liquidation due to lack of liquidity or market manipulation, that is, when the reasonable price is lower than the liquidation price (long position), or higher than the liquidation price (short position), your position will be forced to close the position.

In the event of liquidation, your position will be taken over by the liquidation engine at the bankruptcy price and liquidated in the market.

## Liquidation price

1. Overview: The trigger price for forced liquidation of a position.

If the mark price of the contract is lower than this price (long position) or higher than this price (short position), the contract will trigger the forced liquidation process.

2. Bankruptcy price: refers to the price calculated when the margin locked in the current position is exhausted, that is, the position margin is equal to 0.

3. Calculation formula (take the forward contract as an example):

##### (1) Long position

Forced liquidation price = average opening price * (1- margin rate + maintenance margin rate)

Bankruptcy price = average opening price * (1-margin rate)

##### (2) short positions

Forced liquidation price = average opening price * (1+margin rate-maintenance margin rate)

Bankruptcy price = average opening price * (1+ margin rate)

in:

(Cross position) margin rate = (available balance + position margin – unrealized profit and loss) / opening value

(Isolated Margin) Margin Rate = (Position Margin – Unrealized Profit and Loss) / Opening Value

Note: Other forward contract calculation formulas can be viewed here , and reverse contract calculation formulas can be viewed here.
##### (3) Data update

When performing any of the following operations, it is necessary to recalculate the liquidation price and bankruptcy price

(Isolated Margin) Increase, Close, Margin Call, Reduce Margin, Adjust Leverage

(Cross position) increase position, close position, new increase position order (because it will reduce the available balance)

Note: When the margin is large enough, the liquidation price ≤ 0 will occur when you are long, and the liquidation price will be displayed as 0 at this time.

## Strong liquidation warning

CoinEx will calculate the liquidation risk of the position.

When the liquidation risk reaches 70%, CoinEx will send a forced liquidation warning notification to the user by email or PUSH.

Please pay attention to the information sent.

## Liquidation risk formula

(Isolated Margin) Liquidation Risk = Maintenance Margin / Position Margin * 100%

(Cross position) liquidation risk = maintenance margin / (usable margin + position margin) * 100%