What is liquidation in futures trading?
Updated
Liquidation occurs when your position is automatically closed because the available margin is no longer sufficient to keep the position open. The way liquidation works depends on the margin mode you've selected:
In Isolated Margin
The risk is limited to the margin allocated to that specific position.
If your losses reach the allocated margin, only that position is liquidated.
Your remaining Futures wallet balance and other positions are not affected.
When placing a Futures order, you'll also see an estimated liquidation price, which is calculated based on your selected leverage, margin, and position size.
In Cross Margin
The position uses your entire available USDT Futures wallet balance, along with the margin allocated to all cross-margin positions and eligible unrealised PnL, as a shared margin pool.
If the available margin becomes insufficient, your position may be liquidated, which can result in the loss of your entire USDT Futures wallet balance.
