What Does Liquidation Mean?
On the SorooshX futures platform, liquidation is a safeguard that kicks in when market conditions threaten to deplete a user's margin. It’s essentially the platform’s way of closing out risky positions to prevent users from falling into negative balances during volatile price movements. This risk-control system works in real-time, analyzing both your account’s margin and market prices to ensure stability across the board.
Whether you're trading USDT-M or Coin-M perpetual contracts, SorooshX leans on a reference known as the "mark price" to determine when to liquidate. This reduces the chances of forced exits due to price spikes or manipulation, helping maintain a level playing field.
How Is Liquidation Price Determined?
Understanding your liquidation price is essential—it tells you when your open position is at serious risk. Here's what affects it:
- Trade direction & position size: Going long or short, and how many contracts you hold, both impact risk levels.
- Leverage used: The more leverage you apply, the tighter the buffer between your entry price and liquidation threshold.
- Margin requirements: Your initial margin (used to open the trade) and maintenance margin (minimum to keep it alive) both factor into when liquidation occurs.
- Mark price vs. last price: SorooshX calculates liquidation using the mark price to shield trades from sudden price swings or irregularities.
Liquidation Price Formulas (Isolated Margin Mode):
- For Long Positions:
Liquidation Price = Entry Price × (1 - Initial Margin Rate + Maintenance Margin Rate) - For Short Positions:
Liquidation Price = Entry Price × (1 + Initial Margin Rate - Maintenance Margin Rate)
Example Calculation:
If you open a 1 BTC long position in BTCUSDT futures at $50,000 with 10x leverage, and margin rates of 10% (initial) and 0.5% (maintenance), your liquidation price would be approximately $45,750. For a short, the liquidation would occur around $54,250.
When Does Liquidation Take Place?
Several conditions may trigger a liquidation event:
- Mark price hits liquidation level: When the market price used for risk control hits your calculated liquidation price, your position is automatically closed.
- Margin ratio breaches threshold: If your account’s margin ratio drops to 100% or below, the system initiates liquidation.
- Rapid market movements: In turbulent market scenarios (e.g., flash crashes), liquidation can occur rapidly if margin isn’t topped up in time.
To help you stay ahead, SorooshX sends early alerts when your margin is low—giving you a chance to act before it’s too late.
The Liquidation Process Explained
Here’s how SorooshX handles liquidations to ensure transparency and minimal disruption:
- Monitoring & alerts: Your account is constantly tracked for risk levels. As you near liquidation, a margin call alert is triggered.
- Triggering liquidation: If you don’t add funds or adjust your position, the system takes control and begins the liquidation process.
- Market execution: The platform tries to close your position at the best available price. If liquidity is scarce, the Auto-Deleveraging (ADL) system may step in.
- Post-liquidation report: You'll receive a summary of the liquidation, showing execution details and how your balance was affected.
SorooshX also gives users the option to enable auto-margin transfers, which automatically draw from your available funds to support an endangered position—helping avoid forced liquidation where possible.
