Liquidation

There are two distinct forms of liquidation: partial liquidation and full liquidation.

Liquidation refers to the process of forcibly closing a trader's position when it reaches a predetermined threshold known as the liquidation price. This threshold is typically set to protect the lender or exchange from potential losses if the trader's position moves against them significantly.

When a trader's position is liquidated, it means that their open positions are automatically closed by the exchange or lender. This is done to mitigate the risk of the trader being unable to fulfill their obligations, such as repaying borrowed funds or covering potential losses.

For partial liquidation, price is determined by calculating the price at which (collateral - losses - borrow fee) is less than 1% of your position's size. If the token's price surpasses this threshold, the position will be automatically closed.

It's worth noting that your liquidation price may vary over time due to the borrow fee (funding rate), particularly if you use leverage greater than 10x and keep the position open for multiple days. It is crucial to keep a close eye on your liquidation price.

In the event that there is any remaining collateral after deducting losses and fees, the corresponding amount will be returned to your account.