Why Didn't My Stop Order Trigger Before Liquidation?
Updated
Several factors can prevent a Stop Order from triggering before liquidation, including order type, execution instructions, and rapid market movements. Here are some common reasons and solutions:
Scenario
Text
Order Type & Execution Instructions
Reason
Solution
Mark Price vs. Last Price
Cancelled: Position in liquidation
Rejected: Position in liquidation
Order Type: Stop Limit or Market with execInst: Last
Liquidations are based on the Mark Price, which can differ from the Last Price. The Mark Price might reach your Liquidation Price before the Last Price reaches your Trigger/Stop Price.
Set the Trigger Price to Mark.
Place your Stop Order further from your Liquidation Price.
Stop Limit Order and Volatility
Canceled: Position in liquidation or
Canceled: Cancel from www.bitmex.com (if it was cancelled by you)
Order Type: Stop Limit
When you place a Limit Order with the Stop Price and Limit Price close together, you run the risk in periods of high volatility that your order will be triggered, sit in the Oderbook, and won't get filled. This is because the price moves past your Limit Price immediately after it is triggered and before the order can be filled.
Use a wider spread between your Stop Price and Limit Price to ensure sufficient liquidity for your order to fill
Stop Market Order and Slippage
Rejected: Position in liquidation
Rejected: Executing at order price would lead to immediate liquidation
Order Type: Stop Market
(without execInst: Last or execInst: Index, implying a trigger price of "Mark")
Once a stop order is triggered, an order is submitted to the exchange; however, in a fast-moving market, users may experience slippage.
Due to that, the Mark Price could reach the liquidation price before the order can be executed.
If your Stop Market order is very close to your Liquidation Price, this risk is amplified, as the orderbook may move beyond a fillable range by the time the Stop order triggers.
Use Stop-Limit orders instead of Stop Market orders, as they provide control over the worst acceptable execution price
Place them at a greater distance from your Liquidation Price to allow for market fluctuations
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