In unified trading accounts, margin levels play a critical role in determining when your positions get liquidated. This guide explains the mechanics, common misconceptions, and risk management protocols used by platforms like OKX.
Key Factors Triggering Liquidation
- Margin Level Thresholds: Positions are partially or fully closed when the margin level drops below 100%.
- Partial vs. Full Liquidation: Depending on position size, the system may execute partial reductions before full closure.
- Liquidation Fees: These are collected to bolster the platform's insurance fund during forced closures.
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Calculating Your Liquidation Price
Platforms provide estimators (like OKX's derivative trading calculator) to help traders anticipate liquidation triggers. Important notes:
- Multi-Position Accounts: Liquidation prices vary when holding multiple assets in unified accounts.
- Real-Time Updates: Market volatility affects actual liquidation prices versus estimates.
Account Mode-Specific Calculations
Margin level computations differ by account type:
| Account Mode | Calculation Method |
|---|---|
| Single-Currency Margin | Collateral value vs. position size |
| Cross-Margin Trading | Portfolio-wide collateral evaluation |
| Isolated Margin | Position-specific collateral only |
For detailed methodologies:
Risk Mitigation Strategies
- Maintain Healthy Margin Levels (Always >110%)
- Use Stop-Loss Orders to preempt automatic closures
- Diversify Collateral to reduce single-asset volatility risks
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FAQ: Order Liquidation Explained
Q: Why does liquidation occur above 0% margin?
A: To protect both traders and the platform from cascading market impacts during extreme volatility.
Q: Can I recover funds after liquidation?
A: No - once executed, closures are irreversible. Focus on prevention via margin management.
Q: How often are liquidation prices recalculated?
A: Continuously, based on real-time market data and collateral value fluctuations.
Q: Are there alternatives to forced liquidation?
A: Some platforms offer margin top-up alerts or auto-collateral transfer features.
Legal Disclaimer: This content is for informational purposes only and does not constitute financial advice. Digital assets involve substantial risk - consult a professional before trading. © 2025 OKX. All rights reserved.