7️⃣Liquidation

FIXT perpetual contracts offer high leverage multipliers. To prevent a position from being liquidated, traders must hold margin as a certain percentage of the position value, also known as maintenance margin. The minimum maintenance margin is 0.5% of the parent position. If your position does not meet the margin requirements, your position will be liquidated and you could potentially lose your margin. You can check the liquidation price of each position in “Holding Positions” and adjust the liquidation price by transferring the correct amount of USDT to your actual contract account.

Minimizing Liquidations As Much As Possible

FIXT uses the mark price in real time to avoid liquidations arising from the lack of liquidity, volatility and or potential market manipulation.

If the liquidation is triggered, FIXT, will cancel all unexecuted orders and then accordingly release margin and keep positions.

Liquidation Process

When the margin of the contract position reaches 0.5% of the higher position, all other positions that fall under the contract will be automatically liquidated.

The liquidation process is as follows:

FIXT cancels all unexecuted orders to this contract. Furthermore, if the maintenance margin requirement is not met at this very time, the position is taken over by the liquidation engine at the bankruptcy price.

Examples of liquidation

A trader buys a contract at the price of 100 USDT, the liquidation price is 99.5 USDT and the bankruptcy price is 99 USDT. If the liquidation occurs, this position will be taken over by the liquidation engine at price of 99 USDT and liquidated in the market. If the liquidated order is executed at 99.25 USDT, the insurance fund is 0.25 USDT.

Another trader buys a contract at 100 USDT, the liquidation price is 99.5 USDT and the bankruptcy price is 99 USDT. In the event of a liquidation, the liquidation engine will execute the liquidated order at the lowest price not less than 98.75 USDT, that is: the bankruptcy price 99 USDT minus 0.25 USDT in the insurance fund. The liquidation engine will use the balance of the insurance fund to submit the liquidated order at a more radical price. If the liquidation order is executed at 98.75 USDT, then the insurance fund will become 0 USDT.