To help you better understand and address trading risks, we are providing you with important information about liquidation price and bankruptcy price. These concepts are closely related to your margin management during the trading process.
1. Meaning of Liquidation Price
The liquidation price is the level at which a liquidation event is triggered when the mark price reaches a specific level. At Astral, we employ a rigorous system logic to ensure trading stability and fairness. Specifically, when the mark price of a contract reaches a certain level, the system will automatically execute a liquidation event, which involves forcibly closing positions to reduce your risk exposure.
- The triggering of the liquidation price is based on the following logic: Realized margin rate at a certain price ≤ Maintenance margin rate at the current limit
2. Significance of Bankruptcy Price
Once a liquidation event is triggered, the system will use the bankruptcy price as a reference for settlement and matching. The bankruptcy price refers to the price level at which your margin account's real balance is insufficient to cover the liquidation fees and other related costs at the prevailing market price. This is done to safeguard your interests and the interests of other traders while maintaining the stability of the market.
3. Strategies and Recommendations for Dealing with This
We strongly recommend closely monitoring the status of your margin account to avoid unnecessary losses due to liquidation events. When you receive system notifications requesting additional margin, take prompt action to increase your margin balance. This can effectively reduce your risk and mitigate the impact of unfavorable market fluctuations.
In conclusion, maintain a high level of risk awareness during your trading activities and consistently monitor market dynamics and your account status. While Astral is committed to providing you with a secure and stable trading environment, market risks are ever-present, making sound risk management a key to your success.
If you have any questions or need further assistance, please feel free to contact our customer support team.
Wishing you successful trading!