🤔What Is Forced Liquidation?

in education •  5 years ago 

битфоркс доллар.jpg

BitForex uses an exposure ratio to judge a user’s position risk, while margin trading allows users to add leverage to increase earnings and profits.

⚡️Exposure Ratio = (Maintenance Margin ÷ Account Asset) × 100%


The exposure ratio is used as an indicator to measure the risk of a user’s trades. When the exposure ratio reaches 100%—that is, the account balance is equal to the maintenance margin—the position will be forced to liquidate by the system.

⚡️Tiered-Margin Ratio System


BitForex’s tiered-margin ratio system is adopted to avoid the liquidation of large positions, causing a big impact on market liquidity. Basically, the larger the positions held, the lower the leverage available, and the higher the required initial margin ratio.

⚡️Estimated Forced Liquidation Price


The estimated forced liquidation price is the marked price when the maintenance margin equals the account assets (this price is for reference only).

⚡️Bankruptcy Price


The position will be forced to liquidate by the system at the bankruptcy price* when the account asset is equal to or less than the maintenance margin. The liquidated position at the bankruptcy price will not be processed through the matching system, and the bankruptcy price will not be shown on the market chart.

☝️ Bankruptcy Price is not the same as the actual Forced Liquidation Price.

Trade like a pro with BitForex

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!