The account will get liquidated when the margin ratio in your account falls below the Maintenance margin ratio (MMR). The default margin ratio is 1,000%, indicating you haven’t opened any position. The reference value of MMR is 3%, which could be adjusted slightly according to the IMR factor according to your positions.
The larger the position, the higher the Maintenance margin ratio you will need to uphold. Traders are advised to pay close attention to the movements of the Mark Price and the liquidation price to avoid being liquidated.
Once your account triggers the liquidation engine, you can not place any orders during the liquidation process. The liquidation process will stop if the margin ratio is larger than your account MMR. The liquidation fee includes
- Trading fee: 0.1%
The liquidation engine will carefully close positions to minimize the impact on the market. WOO X utilizes a three-phase liquidation process under a certain margin ratio for all scenarios:
Phase 1: Your Margin Ratio = Account Maintenance Margin RatioOnce your account triggers the liquidation engine at step1, the system will cancel all your pending orders and reduce extra positions carefully to minimize the impact.
- Cancel all pending orders: All pending orders will be canceled, including spot and futures orders.
- Reduce additional positions: If your position notional is larger than the threshold, the system will automatically reduce/settle the extra position of a specific pair in the futures. (What is the threshold in futures? -> IMR Factor and Threshold)
Phase 2: 3% ≥ Your Margin Ratio > 1.5%If the Margin ratio of your account is below 3% and larger than 1.5%. The system will take action and place the IOC (Immediate or cancel) orders to liquidate.
- The liquidation engine will close down 20% of current futures positions.
- The liquidation engine will close the position if the notional is lower than 2,000 USDT
- Note: The liquidation engine will retreat If partial liquidation causes its margin ratio to rise above the maintenance margin ratio.
Phase 3: 1.5% ≥ Your Margin RatioIf your margin ratio is below 1.5%, your account will trigger the liquidation engine and enter Phase 3 directly. Phase 3 is the last section of liquidation. Your account will begin to close down against the liquidation engine. The liquidation engine will reduce 50% of the position of each pair.
- Non-USDT collateral: The liquidation engine will sell your collateral to cover your negative amount of USDT to reduce partial positions. If your Margin ratio is still lower than the maintenance margin ratio ( Approximate 3%), all your positions will be fully liquidated.