Overview
Liquidation occurs when your account's maintenance margin ratio fails to meet requirements, triggering an automated risk management process. Specifically, when your maintenance margin ratio drops to 100% (meaning your account equity equals or falls below required maintenance margin plus applicable closing fees), the system will: cancel orders, partially/fully close positions. Procedures vary by account mode.
Certain products/services follow different liquidation rules with unique terms. Always manage position risk levels and maintain required margin ratios.
Maintenance Margin Rate Requirements
The maintenance margin rate represents the minimum collateral needed to sustain positions. It's dynamically calculated based on:
Key Determinants:
- Adjusted Equity (total account value including unrealized P&L)
- Maintenance Margin Requirements (vary by account mode & position tier)
This percentage-based metric adjusts continuously with your equity and trading parameters.
A. Account Mode Differences
| Mode | Calculation Method |
|---|---|
| Isolated Margin | Per-position maintenance margin calculated individually |
| Cross Margin (Spot/Futures) | Aggregate risk across all positions determines maintenance requirement |
| Portfolio Margin | Based on stress-test losses rather than fixed margin rates |
B. Position Tiers
Larger positions fall into higher tiers requiring:
- Increased maintenance margins
- Lower permitted leverage
- Gradient systems protect market liquidity by preventing disorderly liquidations
Example: BTC futures cross-margin accounts combine contracts across expiries to determine tier thresholds.
Liquidation Fees & Costs
When maintenance margin ≤100%, automatic forced liquidation initiates with:
- Liquidation Fee: Charged per your fee tier rate (option trades add 12.5% of premium)
- Liquidation Cost: Covers market volatility impacts (slippage/losses)
Net proceeds from these fees deposit into OKX's risk reserve fund for user protection.
Fee Calculation Methods
| Product | Formula |
|---|---|
| Spot/Leverage | Liability = ABS(borrowed amount) × tiered maintenance rate |
| Contracts | (Contract face value × multiplier × mark price) × tiered rate |
| Options* | Configurable coefficient × margin factor × liquidated contracts |
*Portfolio margin options use customized calculations
Liquidation Process Flow
Trigger Phase:
- Order cancellations/rejections
- Risk reserve deployment (at OKX's discretion)
Execution Paths:
Isolated/Cross Margin:
- Liability assumption by tier
- Asset-side deductions to repay debts + fees
Multi-Currency/Portfolio Margin:
- Non-USDT debts: Prioritize liability settlement by liquidity
- USDT debts: Asset liquidation ordered by discount rates
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FAQs
Q: How often do margin requirements update?
A: Maintenance rates recalculate in real-time as positions and market prices change.
Q: Can I avoid liquidation once triggered?
A: No - the process is automated when thresholds breach 100%, though adding collateral pre-emptively may prevent it.
Q: Does OKX guarantee loss coverage?
A: No. Risk reserve usage remains at OKX's sole discretion without obligation.
Q: Why do tiered requirements exist?
A: They prevent market disruption by gradually reducing leverage for larger positions.
Q: How are option liquidations different?
A: Premium-based fees and configurable coefficients create unique calculations.
Q: Where can I check current tier thresholds?
A: Refer to OKX's official documentation pages for up-to-date tables.
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Disclaimer: Digital asset trading involves substantial risk. This material isn't investment advice. OKX makes no representations regarding compensation for losses. Review full terms at official documentation.
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