A liquidation occurs when your position’s equity falls below the maintenance margin requirement and you no longer have enough funds (margin) to maintain it. BitMEX uses the Mark Price, not the last traded price, to calculate whether this threshold has been breached.
Specifically:
- For Long Positions: Liquidation occurs when the Mark Price falls below your Liquidation Price, indicating your Maintenance Margin has been breached.
- For Short Positions: Conversely, if the Mark Price rises to or above your Liquidation Price, the same process occurs.
The most common causes of liquidation are:
- Adverse price movement. The market moved against your position. For a long position, the price dropped. For a short position, the price rose. The unrealised loss consumed your margin.
- High leverage. Higher leverage means less margin backs the position and a smaller price move triggers liquidation. At 100x leverage, a roughly 0.5% adverse move takes you past maintenance margin and liquidates the position.
- Funding fee deductions. Funding payments on perpetual swaps are deducted from position margin. Repeated funding payments erode margin over time, bringing the liquidation price closer.
- Insufficient margin top-up. On isolated margin, if you do not add margin as the position moves against you, the fixed allocation runs out faster. On cross margin, other losing positions can draw down the shared balance.
Once the Mark Price crosses your liquidation price, the Liquidation Engine takes over and closes the position. You lose the margin allocated to that position.
How can I check my liquidation history?
Navigate to the Trade History section of your BitMEX account. Liquidation events are recorded as “Liquidation” in the order type column. Each entry shows the contract, price, quantity, and timestamp.
You can also check the Positions tab during active trading. Your current liquidation price is displayed next to each open position and updates in real time as margin and leverage change.
How can I avoid getting liquidated in future?
Five practices reduce the probability of liquidation:
- Use lower leverage. Lower leverage increases the margin buffer and the distance to your liquidation price. Start with two to five times for new positions.
- Set a stop-loss order. Place a stop-loss before entering the trade. This exits the position at a predetermined price before liquidation triggers.
- Monitor the funding rate. High funding rates erode margin. Avoid holding positions through funding intervals when rates are elevated.
- Add margin to isolated positions. Use the margin top-up function to increase the margin on an isolated position, pushing the liquidation price further from the market.
- Use isolated margin for speculative trades. Isolated margin caps the loss to the assigned amount. Cross margin puts your entire balance at risk.