Liquidation FAQ
September 19, 2025 at 08:20 PMDear Users,
To help you better understand trading and liquidation mechanisms, we have summarized the most common questions regarding liquidation.
- What is the difference between Liquidation Price and Bankruptcy Price?
- Liquidation Price: The mark price that triggers liquidation. When reached, your margin ratio ≤100%.
- Bankruptcy Price: The price at which the system takes over your position and sets account equity to zero. It is independent of market price and prevents negative balances.
- What is the difference between Mark Price and Last Traded Price?
- Mark Price: Weighted average of multiple market prices, used to calculate margin ratio and trigger liquidation. Smoother and less affected by extreme volatility.
- Last Traded Price: Real-time market price, used for PnL calculation, but does not trigger liquidation.
- Why doesn’t the Bankruptcy Price appear on K-Line charts?
- The bankruptcy price may not correspond to an actual market transaction, so it does not appear on K-line charts.
- This mechanism ensures market stability and prevents negative balances.
- Why does the system use Bankruptcy Price instead of Liquidation Price?
- Using bankruptcy price prevents losses exceeding account equity (negative balance).
- It ensures positions are taken over promptly, reducing risk and protecting both users and the platform.
Reminder:
- Liquidation is a normal trading mechanism; please trade responsibly and understand the risks.
- For detailed calculations or questions, contact BloFin Customer Support.
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