What is Forced Liquidation?
To keep hedging positions open, traders are required to hold a certain percentage of the value of the hedging orders, known as the Maintenance Margin. If you cannot fulfill your Maintenance Margin requirement, your hedging positions will be liquidated (When Margin Rate ≤ Maintenance Margin Rate, the system will conduct forced liquidation).
ViaBTC Hedging Service uses Index Price Marking to avoid liquidation caused by illiquid markets or manipulation. A liquidation will be triggered when the Index price is higher than the liquidation price.
Estimated Liquidation Price
The system calculates the estimated liquidation price based on the current hedging amount and the maintenance margin level system of the hedging coin.
Formula: Estimated Liquidation Price = Total USDT Assets / ( To-be-repaid Amount +Frozen Assets +To-be-repaid Amount * Maintenance Margin Rate -Total Hedging Assets)
Note: If a hedging account has a large hedging asset and the liquidation price is negative according to the above formula, the liquidation price will be displayed as "∞" .