> For the complete documentation index, see [llms.txt](https://docs.chainbitx.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.chainbitx.com/help-center/eng/readme/trading-guide/basics-of-contract-trading/liquidation-price-and-maintenance-margin.md).

# Liquidation Price and Maintenance Margin

**Liquidation Price** The liquidation price is the market price at which the system will automatically close the position to prevent the account from going negative. Liquidation is one of the most critical risk control concepts in perpetual contract trading. ChainBitX dynamically calculates the liquidation price for each position based on the user’s position direction, leverage, margin amount, and other factors. For example: If a user goes long BTC with 10x leverage, when BTC falls to a certain price (the liquidation price), the user’s position will be forcibly closed. At this point, the user no longer has sufficient margin to cover the loss. Liquidation results in the total loss of margin and may cause negative balance risk in severe cases. ChainBitX pre-calculates and displays the liquidation price at the time of opening a position. Users can check and set alert lines anytime on the “Positions” page to avoid passive liquidation.

Factors affecting the liquidation price include leverage, position direction, position size, and account balance. High leverage means the liquidation price is closer to the current market price, increasing risk. For example, for the same long BTC position, using 5x leverage might have a liquidation price at -20%, whereas using 20x leverage may trigger liquidation after only a -5% price drop. Therefore, ChainBitX strongly recommends beginners start with low leverage and gradually learn risk control.

**Liquidation Calculation Logic Explanation** The system uses the “Mark Price” to calculate liquidation instead of the current transaction price to prevent malicious price manipulation during liquidation. ChainBitX uses a weighted average price from multiple platforms as the source of the mark price, avoiding manipulation from a single exchange. The mark price is more stable and less affected by large orders or short-term extreme volatility, protecting users from malicious liquidation.

The platform automatically deducts the maintenance margin and collects forced liquidation fees. Maintenance margin is the minimum asset amount required to maintain a position, usually 0.5% to 1% of the initial margin. Upon liquidation, the platform automatically deducts the remaining margin and settles the forced liquidation fee. The system also records liquidation details and sends email/in-site notifications.

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