Dear valued customers,
To enhance transaction efficiency for liquidated futures positions and reduce clawback rates, we've upgraded our liquidated futures position price calculation and price change strategy. These changes took effect on February 20, 2019 (CET, UTC+1). Below are the key details:
1. Key Terminology
| Term | Definition |
|------|-----------|
| Forced-Liquidation Price | Triggered when market price hits this level, and user margin is insufficient. |
| Bankruptcy Price | Price at which a user loses all margin. |
| Entrusted Price of Liquidated Position | Price set by the forced-liquidation engine when reselling the position. |
| Trading Price of Liquidated Position | Actual transaction price in the market. |
2. Upgraded Liquidated Futures Position Price Calculation
Objective
Replace the bankruptcy price with a more dynamic entrusted price based on:
- Market depth
- Basis (price difference between futures and spot)
- Index price
Rationale
- Avoids market disruption by preventing bulk sell-offs at the bankruptcy price.
- Enhances insurance fund growth by improving returns from liquidated positions.
👉 Learn how market depth affects liquidation pricing
3. Price Change Strategy for Liquidated Futures Positions
Objective
- Prevent prolonged margin call loss and clawback risk in volatile markets.
Rationale
- The engine continuously monitors unfilled orders.
If an order remains unfilled for too long, it will be reposted at an adjusted price based on real-time:
- Market depth
- Basis
- Bankruptcy price
- Index price
This ensures liquidated positions are closed efficiently.
4. Tracking Margin Call Losses & Clawback
Margin Call Losses
- If a liquidated position trades below bankruptcy price (long) or above (short), losses arise from the price difference.
- These losses appear in the forced-liquidation list.
Clawback Mechanism
- Total loss = Fulfilled + Unfulfilled position losses.
- Covered by insurance fund first; remaining loss triggers clawback.
👉 Understand clawback risks and insurance funds
FAQs
Q1: How does the new price calculation benefit traders?
A: It reduces market impact and improves execution efficiency, lowering overall clawback risk.
Q2: Will liquidated positions always trade at the bankruptcy price?
A: No—entrusted prices now factor in market depth and basis, leading to fairer pricing.
Q3: What happens if the insurance fund can’t cover losses?
A: The remaining loss is socialized via clawback across profitable traders.
Q4: How can I check my margin call losses?
A: Visit the forced-liquidation page for a full breakdown.
For further questions, contact [email protected].
Thank you for your trust and support!
OKX Team