How to calculate liquidation price
Liquidation is an automatic procedure that occurs if the reserved margin is no longer sufficient to cover further losses from a position. If liquidation occurs, all currently open deals will be automatically closed at market price.
General formulas for calculating liquidation price:
Liq Price (Long) = OpenPrice - (Margin - OpenOrderCommission - CloseOrderCommission - Funding) / SizeInBTC * OpenPrice
Liq Price (Short) = OpenPrice + (Margin - OpenOrderCommission - CloseOrderCommission - Funding) / SizeInBTC * OpenPrice ,
where, OpenOrderCommission is:
MakerFee 0.1% for a LIMIT type of order
TakerFee 0.2% for a MARKET type of order
and CloseOrderCommission is:
TakerFee 0.2%
In such calculations, trade fee fractions are rounded up
EXAMPLE of calculation of liquidation price (Limit Order):
OpenOrderCommission = SizeBTC * MakerFee = 0.01 * 0.001 = 0.00001 BTC
CloseOrderCommission = SizeBTC * TakerFee = 0.01 * 0.002 = 0.00002 BTC
- For LONG deals:
- Liq Price (Long) = OpenPrice - (Margin - OpenOrderCommission - CloseOrderCommission - Funding) / SizeInBTC * OpenPrice
- Liq Price (Long) = 10000 - (0.0001 - OpenOrderCommission - CloseOrderCommission - 0.01*0) / (100 * 0.0001) * 10000 = 10000 - (0.0001 - 0,01 * 0,001 - 0,01 * 0,001 - 0.01*0) / 0.01 * 10000
- Liq Price (Long) = 9930.0
- For SHORT deals:
- Liq Price (Short) = OpenPrice + (Margin - OpenOrderCommission - CloseOrderCommission - Funding) / SizeInBTC * OpenPrice
- Liq Price (Short) = 10000 + (0.0001 - OpenOrderCommission - CloseOrderCommission - 0.01*0) / (100 * 0.0001) * 10000 = 10000 + (0.0001 - 0.01 * 0.001 - 0.01 * 0.002 - 0.01*0) / 0.01 * 10000
- Liq Price (Short) = 10070.00
EXAMPLE of calculation of liquidation price (Market order):
OpenOrderCommission = SizeBTC * TakerFee = 0.01 * 0.002 = 0.00002 BTC
CloseOrderCommission = SizeBTC * TakerFee = 0.01 * 0.002 = 0.00002 BTC
- For LONG positions:
- Liq Price (Long) = OpenPrice - (Margin - OpenOrderCommission - CloseOrderCommission - Funding) / SizeInBTC * OpenPrice
- Liq Price (Long) = 10000 - (0.0001 — OpenOrderCommission — CloseOrderCommission — 0.01*0)/(100 * 0.0001) * 10000 = 10000 — (0.0001 - 0.00002001 - 0.00002001- 0.01*0) / 0.01 * 10000
- Liq Price (Long) = 9940.00
- For SHORT positions:
- Liq Price (Short) = OpenPrice + (Margin - OpenOrderCommission - CloseOrderCommission - Funding) / SizeInBTC * OpenPrice ,
- Liq Price (Short) = 10000 + (0.0001 - OpenOrderCommission - CloseOrderCommission - 0.01*0) / (100 * 0.0001) * 10000 = 10000 + (0.0001- 0.00002001 - 0.00002001- 0.01*0) / 0.01 * 10000
- Liq Price (Short) = 10059.98