Unified Maintenance Margin ratio (uniMMR) falls below 105%. In such cases, the liquidation system will take over the account and the user will not be able to perform any transactions during the liquidation process.
Once liquidation is triggered, it won't stop until it's completed. Transferring assets into the Margin, USDⓈ-M Futures, or Coin-M Futures Wallets after liquidation has begun will not stop nor reverse the process. You can learn how to calculate uniMMR from this article.
When your margin position is liquidated, the margin liquidation engine will take over the assets on the account and sell them to cover the liabilities.
Understanding liquidation risks and the importance of margin checks
Since there is no margin check at the order level, placing a large order may cause the uniMMR to drop below 105% when the order is executed, increasing the risk of being liquidated. Therefore, you are recommended to perform margin checks before placing an order. You can also set an adequate risk control framework to mitigate liquidation risks.
Is there a liquidation fee?
The Classic Portfolio Margin Program will charge a liquidation fee when liquidation occurs. When your portfolio margin positions are liquidated (including futures positions and margin loans), a certain percentage of the Insurance Clearance fee will be collected and contributed to Insurance Fund reserves. This is marked as “Insurance Clearance” under your [Transaction History].
Please refer to the respective articles for more details on Futures and Margin positions' liquidation clearance fees.
Liquidation process of USDⓈ-M and COIN-M positions
All liquidation orders are executed as Immediate or Cancel (IOC) orders during the liquidation process. IOC orders aim to fill as much of the liquidated position as possible. If there are any remaining positions after the partial execution of the order, they will be handled in one of two ways:
Assigned to the Insurance Fund: Some or all of the remaining positions may be assigned to the Insurance Fund. This helps to mitigate the impact of the liquidation event and contributes to maintaining the overall stability of the platform.
Assigned to Auto-Deleveraging (ADL): For positions exceeding the maximum amount of Insurance Fund coverage, ADL will be triggered.
Binance applies liquidation clearance fees for both Margin and Futures positions. Please refer to the respective articles for more details on Futures and Margin positions' liquidation clearance fees.
Automated negative balance clearance via pmLoan
If your account is bankrupt after liquidation, the liquidation engine will automatically convert your account’s negative assets/liabilities into a USDT Loan in the equivalent USD value (pmLoan).
Once liquidation occurs, please check whether your account has any pmLoan. You can repay it through the SAPI API endpoint or the Cross Margin Wallet from the website or the App.
Please note:
Upon bankruptcy caused by liquidation, the liquidation engine will automatically convert your account’s negative assets/liabilities into a USDT Loan of an equivalent USD value (pmLoan).
You must repay the pmLoan first to restore the trading functions.
The pmLoan is currently interest-free.
When you repay the pmLoan, the system will check whether you have a sufficient USDT balance in the Spot Wallet to cover the loan amount before transferring USDT from your Spot Wallet to your Cross Margin Wallet.
pmLoan data and repayment can be requested via the following APIs:
GET /sapi/v1/portfolio/pmLoan
POST /sapi/v1/portfolio/repay
For more details, please refer to the Classic Portfolio Margin API Interface section.
Margin call notifications
Binance will notify users by email and inmail when their uniMMR falls below the following levels:
A first margin call will be sent when the uniMMR ≤ 200%;
A second margin call will be sent when the uniMMR ≤ 150%;
Your account will be automatically changed to reduce-only mode (opening new positions and margin loans will be suspended) when the uniMMR ≤ 120%;
You will receive a liquidation call when the uniMMR ≤ 105%.
API error codes during liquidation
When your account is in reduce-only or liquidation mode, the following order entry error codes will be in effect:
Account Status/UniMMR Range
Order Entry Response Error Code
uniMMR < 105%
UNABLE_TRADE_LOW_LIQUIDATION(HttpStatus.BAD_REQUEST, -3048, "Unable to trade. Your margin account is currently in liquidation. Please try again once the liquidation is processed.")
105% ≤ uniMMR < 120%
Futures Fapi/dapi error code: unchanged
When uniMMR falls below 120%: reduce-only error code
Liquidation occurs when an account's Unified Maintenance Margin ratio (uniMMR) falls below 105%. In such cases, the liquidation system will take over the account and the user will not be able to perform any transactions during the liquidation process. Once liquidation is triggered, it won't stop until it's completed.
Margin balance is the sum of a wallet balance and unrealized PnL, while maintenance margin is the minimum amount of margin traders must maintain in order to keep their futures position open. On Binance Futures, liquidation occurs at Mark Price, which is the estimated true value of a contract.
What Happens When Margin Is Liquidated? If an investor receives a margin call but is unable to come up with the funds to satisfy it, the broker may be forced to sell the traders holding until the value of the margin call has been satisfied.
What does Liquidation mean? When your Margin Wallet Balance falls below your Maintenance Balance, your Health Score will be lower than 1.0, the minimum risk threshold. In this scenario, Liquidation is triggered.
The liquidation of a company happens when company assets are sold when it can no longer meet its financial obligations. Sometimes, the company ceases operations entirely and is deregistered. The assets are sold to pay back various claimants, such as creditors and shareholders.
In fact, your broker can liquidate your margin account holdings without even issuing a margin call. For this reason, you should monitor the equity levels in your margin account closely to avoid unanticipated liquidations.
If the stock had fallen even further, you could theoretically lose all of your initial investment and still have to repay the amount you borrowed, plus interest.
The “margin liquidation level” is the margin level at which an automated liquidation process will occur. The margin liquidation level is approximately 40%, although the exact threshold varies in accordance with the price volatility in applicable markets. Reaching this threshold will trigger the liquidation process.
For example, employing 5x leverage means the position will be liquidated if the asset's price moves 20% against the trader's position (100/5 = 20). This calculation provides traders with insights into the level of market movement required to trigger liquidation, assisting in risk management strategies.
Increased Risk: While margin trading can amplify profits, it also amplifies losses. Liquidation: If a trader's margin level falls below liquidation thresholds, the platform may liquidate their assets to recover the borrowed funds.
During the liquidation process of positions on Binance Futures, the exchange charges traders a fee ranging between 1% and 1.5%. This percentage is determined by the type of futures contract being traded.
If a trader's position is liquidated, all open orders of the trader (in cross margin mode) or all open orders of the trader in the same token (in isolated margin mode) will immediately be canceled.
Risk Ratio = Total Assets / (Total Amount Borrowed + Interest Payable). Using the "i" currency as an example: Therefore, the liquidation reference price for "i" currency is: Ratio of the Index Price to the Liquidation Reference Price = (Liquidation Price - Index Price) / Index Price.
If a liquidation level is reached and a trader's positions are closed, the trades will occur at the best available price when the positions close. If the market is volatile or prices fall quickly, the trades can take place at a lower-than-expected price, leading to larger losses than anticipated.
Check your margin ratio regularly and add more margin to your account if necessary. This will help to prevent you from being liquidated. Trade with a risk management plan. Develop a risk management plan that outlines your maximum position size, stop-loss levels, and leverage usage.
Address: Apt. 915 481 Sipes Cliff, New Gonzalobury, CO 80176
Phone: +6773780339780
Job: Sales Executive
Hobby: Gaming, Jogging, Rugby, Video gaming, Handball, Ice skating, Web surfing
Introduction: My name is Carmelo Roob, I am a modern, handsome, delightful, comfortable, attractive, vast, good person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
