Billance perpetual contracts provide high multipliers of leverage. To keep a position from being liquidated, traders must hold margin at a certain proportion of the position value, which is also known as the maintenance margin. The minimum maintenance margin is 0.5% of the higher position. If your position does not meet the margin requirement, it will be liquidated, and you will potentially loss the margin. You can view the liquidation price of each position under "Holding Position" and adjust the liquidation price by transferring correct amount of USDT to the actual contract account.
Minimizing Liquidations As Much As Possible
Billance 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, Billance, will cancel all unexecuted orders and then accordingly release margin and keep positions.
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:
Billance 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.
System Profit and Loss
If Billance can liquidate at a price better than the bankruptcy price, the additional funds will be added to the insurance fund. If Billance is unable to liquidate at the bankruptcy price, Billance will accordingly apply the insurance fund and attempt to close it. If this still does not close the liquidated order, this will then lead to an Auto-Deleveraging event.
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.