You cannot lose more than you deposit on BitMEX. BitMEX has a margin and liquidation process designed to prevent any trader’s margin balance from ever going below zero. The system liquidates positions before losses can exceed deposited margin.
Can my margin balance go below zero on BitMEX?
No. When your position’s unrealised loss approaches the maintenance margin threshold, the liquidation engine closes the position automatically. This occurs before the position reaches the bankruptcy price (the point at which losses would equal 100% of the margin).
What protections does BitMEX have against trader bankruptcy?
BitMEX uses a three-layer protection system to prevent negative balances:
- Liquidation engine. Automatically closes positions before losses exceed margin. The engine triggers at the maintenance margin level, not at the bankruptcy price.
- Insurance Fund. Absorbs losses when liquidated positions close below the bankruptcy price. The fund is built from surpluses on successful liquidations.
- Auto-Deleveraging (ADL). Activates as a last resort if the Insurance Fund cannot cover the shortfall. ADL reduces positions held by opposing traders to balance the system.
These three layers work in sequence. Under normal market conditions, the liquidation engine handles the vast majority of cases. ADL events are rare and occur only during extreme market volatility.