Overview
Liquidation occurs when the margin in your account does not meet the required level, and the system automatically handles your risky positions. Specifically, when your risk ratio reaches 100%—meaning your account equity is equal to or less than the required maintenance margin plus any applicable closing fees—the liquidation process begins. The process includes canceling orders, partial liquidation, and/or full liquidation. You should manage your position risks and maintain the required margin.
Maintenance Margin
Maintenance margin is the minimum amount of margin required to keep a position open. Formula: Maintenance Margin = Position Value × Maintenance Margin Rate The maintenance margin rate is not fixed; it varies depending on the margin mode and the risk limit tier.
Margin Modes
- Isolated Margin Mode: Maintenance margin is calculated separately for each position.
- Cross Margin Mode: Maintenance margin is calculated based on the combined risk of all positions.
Risk Limit Tiers
Maintenance margin requirements may also vary depending on the risk limit tier. The larger the position size, the higher the tier, which means higher maintenance margin requirements but lower maximum leverage allowed.
This tiered system helps reduce platform risk as position sizes increase and prevents large liquidations from negatively impacting market liquidity. Generally, the larger the position, the higher the maintenance margin requirement and the lower the maximum leverage available.
Risk Limits
- Isolated Mode: Each contract and direction calculates “position value,” “tier,” and “required maintenance margin rate” independently.
- Cross Mode: All positions of the same contract are calculated together to determine “position value,” “tier,” and “required maintenance margin rate.”
The table below shows the BTCUSDT Contract Risk Limit Tier Rules:
BTCUSDT Margin Tier Table
Tier | Risk Limit | Maintenance Margin Rate (%) | Initial Margin Rate (%) | Max Leverage |
1 | 100,000 | 0.5 | 1 | 100 |
2 | 200,000 | 1 | 1.75 | 57.1 |
3 | 300,000 | 1.5 | 2.5 | 40 |
4 | 400,000 | 2 | 3.25 | 30 |
5 | 500,000 | 2.5 | 4 | 25 |
6 | 600,000 | 3 | 4.75 | 21.1 |
7 | 700,000 | 3.5 | 5.5 | 18.2 |
8 | 800,000 | 4 | 6.25 | 16 |
9 | 900,000 | 4.5 | 7 | 14.3 |
10 | 1,000,000 | 5 | 7.75 | 12.9 |
11 | 1,100,000 | 5.5 | 8.5 | 11.8 |
12 | 1,200,000 | 6 | 9.25 | 10.8 |
13 | 1,300,000 | 6.5 | 10 | 10 |
14 | 1,400,000 | 7 | 10.75 | 9.3 |
15 | 1,500,000 | 7.5 | 11.5 | 8.7 |
16 | 1,600,000 | 8 | 12.25 | 8.2 |
17 | 1,700,000 | 8.5 | 13 | 7.7 |
18 | 1,800,000 | 9 | 13.75 | 7.3 |
19 | 1,900,000 | 9.5 | 14.5 | 6.9 |
20 | 2,000,000 | 10 | 15.25 | 6.6 |
21 | 2,100,000 | 10.5 | 16 | 6.3 |
22 | 2,200,000 | 11 | 16.75 | 6 |
23 | 2,300,000 | 11.5 | 17.5 | 5.7 |
24 | 2,400,000 | 12 | 18.25 | 5.5 |
25 | 2,500,000 | 12.5 | 19 | 5.3 |
26 | 2,600,000 | 13 | 19.75 | 5.1 |
27 | 2,700,000 | 13.5 | 20.5 | 4.9 |
28 | 2,800,000 | 14 | 21.25 | 4.7 |
29 | 2,900,000 | 14.5 | 22 | 4.5 |
30 | Max Value | 15 | 22.75 | 4.4 |
Liquidation Process
When your position’s risk ratio reaches or exceeds 100%, Coinstore begins the liquidation process.
Example: Cross Margin Mode
- If the risk ratio ≥ 100%, the system starts liquidation by first canceling all open orders for the contract.
- After canceling all orders, the system attempts internal matching between long and short positions of the same contract.
- If the risk ratio falls below 100% at this stage, liquidation ends.
- If the risk ratio remains ≥ 100%, the system will forcibly reduce positions step by step according to the risk limit tiers, lowering the required maintenance margin rate until the risk ratio is below 100%.
- If the position is reduced to the lowest tier and the risk ratio is still ≥ 100%, the remaining position is taken over by the insurance fund at the bankruptcy price.
- After takeover, the insurance fund liquidates the position on the market. If the execution price is worse than the bankruptcy price (user incurs negative balance), the insurance fund covers the loss.
- If market volatility is extreme and the insurance fund balance exceeds the alert threshold, the ADL (Auto-Deleveraging) mechanism will be triggered.
Disclaimer: This information does not provide advice on investment, taxation, legal, financial, accounting, consultancy, or any other related services, nor is it advice to purchase, sell, or hold any assets. The Coinstore Learn provides information for reference purposes only and does not constitute any investment advice. Please ensure a thorough understanding of the risks involved and invest cautiously. All user investment activities are unrelated to this platform.