When a futures position’s maintenance margin ratio falls to ≤100%, partial liquidation (deleveraging) or full liquidation occurs. Liquidation doesn’t immediately close the entire position—it first reduces the position size incrementally.
Before placing orders, you can use built-in calculators to estimate liquidation prices or manually project the liquidation range.
Liquidation prices are based on mark prices (visible via chart tools). Standard trading fees apply during liquidation, plus a penalty fee covering slippage and potential insurance fund deficits.
1. How Futures Liquidation Works
Liquidation is triggered when a position or account’s maintenance margin ratio reaches dangerous levels. The process involves:
– Pre-Liquidation Checks (order cancellations)
– Partial Position Reduction
– Full Liquidation
Procedures vary by trading mode—refer to cross/isolated margin rules for specifics.
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Gradient Liquidation Mechanism
OKX employs a tiered liquidation approach:
1. System automatically reduces oversized positions first
2. Full liquidation only occurs if deleveraging fails to restore safe margins
This minimizes market impact during large-scale liquidations.
2. Calculating Liquidation Prices
Mobile App Calculator
- Navigate to Futures trading → Tap top-right menu → Select Calculator
- Choose:
- Contract (e.g., BTCUSDT perpetual)
- Margin type (Cross/Isolated)
- Long/Short position
- Input:
- Leverage (e.g., 3x)
- Entry price (e.g., $60,996)
- Position size (e.g., 0.5 BTC)
- Available margin (e.g., $5,000 USDT)
- Results display estimated liquidation price (e.g., $51,226.50)
Web Platform Calculator
- Go to Trade → Futures
- Click calculator icon → Liquidation Price
- Select contract type and position details
- Enter leverage, entry price, and margin data
Manual Estimation Formulas
Isolated Margin
Liquidation price ≈ Entry price ± (Entry price × 100% / Leverage)
Example (20x leverage long):
$50,000 entry → ~$47,500 liquidation (after adjusting for fees)
Cross Margin
Liquidation price ≈ Entry price ± [Entry price × 100% / (Leverage × Position %)]
Example (20x leverage, 50% position):
$50,000 entry → ~$45,000 liquidation
3. Liquidation Fees
When maintenance margin ≤100%, these apply:
– Standard taker fees based on your VIP level
– Minimum 12.5% of option premiums (for options trading)
4. Liquidation Penalties
Additional charges covering:
– Order execution slippage
– Potential insurance fund deficits
Net penalties contribute to risk reserve pools protecting traders.
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5. Maintenance Margin Ratio Formulas
Single-Currency Cross Margin
Formula:
(Margin balance + PNL – Pending orders – Option bids – Isolated requirements – Order fees) / (Maintenance margin + Liquidation fees)
Components:
– Maintenance margin: Sum of leveraged, futures, perpetuals, and options requirements
– Liquidation fees: Taker fees applied to all active positions
Multi-Currency Cross Margin
Formula:
Available margin / (Maintenance margin + Partial liquidation fees)
Calculated based on:
– Open positions + pending orders
Isolated Margin (All Modes)
Long:
[Position value – (Debt + Interest) / Mark price] / (Maintenance margin + Fees)
Short:
[Position value – |Debt + Interest| × Mark price] / (Maintenance margin + Fees)
Key Liquidation Factors
| Variable | Impact | Example |
|---|---|---|
| Leverage | Higher leverage → Closer liquidation | 20x vs 5x |
| Position Size | Larger positions → Higher risk | 50% vs 10% |
| Market Volatility | Increased price swings → Faster triggers | ±5% moves |
| Margin Added | Extra collateral pushes liquidation farther | +$1,000 |
FAQs
Q: Can I prevent liquidation?
A: Yes—add margin or reduce position size before hitting maintenance levels.
Q: Why does mark price determine liquidation?
A: Prevents manipulation from anomalous spot market prices.
Q: How often are positions checked for liquidation?
A: Real-time monitoring—no fixed intervals.
Q: Are liquidation penalties refundable?
A: No, they cover system costs from forced closures.
Q: What happens if insurance funds are depleted?
A: Platforms may implement socialized loss mechanisms (rare).
Q: Can I set liquidation price alerts?
A: Yes—configure price alerts at 90-95% of estimated liquidation levels.