Key Words: Forced-Liquidation Engine, Margin Rate, Insurance Fund

1. Forced Liquidation in Isolated Margin Mode

I. Forced-Liquidation Engine

To prevent negative equity, forced liquidation will be triggered when the remaining margin ratio of the position reaches the adjustment factor.

The adjustment factor is designed to prevent negative equity. For more information, please refer to: https://bingx.com/tradeInfo/futures-trade-info/?type=futures-adjust-coefficient&pair=BTC-USDT

For example, if the adjustment factor is set at 10%, it means that the position will be forced liquidated when it incurs a loss of 90%.

II. Forced Liquidation

If a position is liquidated at a price better than the bankruptcy price (a price at which the margin is 0), a liquidation surplus will be generated. This surplus will be injected into the Insurance Fund to cover any deficit when the close price is worse than the bankruptcy price.

III. Insurance Fund

Insurance Fund is set up by the platform as a financial guarantee to maintain the normal operation of futures trading, which is used to protect traders from negative equity and being held accountable for excessive losses.

IV. Changes of Estimated Liquidation Price in Isolated Margin Mode

In Isolated Margin Mode, changes may occur to an order's estimated liquidation price due to the following factors.

• Margin adjustments (including margin increases or decreases) performed by the user during holding positions
• Settlement of funding charges (including paying or obtaining funding fees) for positions

2. Forced Liquidation In Cross Margin Mode

In Cross Margin Mode, the margin of all positions and the remaining funds in the account will be shared to bear the risk. This means that each position can lose more than the margin of that specific position. When continuous losses lead to the account reaching the liquidation point, all positions will be forced to liquidate at the same time, and you will lose all account funds.

FAQ

I. Reasons for the Change of Estimated Liquidation Price in the Cross Margin Mode

In order to give users a more intuitive sense of the risks in the Cross Margin mode, BingX provides users with an estimated liquidation price for reference. When the estimated liquidation price is reached, the margin rate will go to 0. All positions will be forced to close. However, the liquidation price is expected to change.

• When the user holds positions in multiple trading pairs, the price change of each trading pair will cause changes in the PnL of the order and the estimated liquidation price will change accordingly.
• When the user holds positions of a single trading pair, the charge of funding fees will affect the overall funds of the account. Therefore, the estimated liquidation price will change along with the settlement of funding fees.
• Any actions that can directly cause changes in account funds such as opening or closing positions will affect the estimated liquidation price.

II. Reasons for Forced Liquidation of Floating Profit in Cross Margin Mode

Please note that the margin rate is the only trigger factor for forced liquidation. Margin Rate = Equity / ∑(Order Margin * Adjustment Factor) - 1

The adjustment factor is designed to prevent negative equity. To put it in detail:

When the margin rate is 0, forced liquidation will still be triggered even if the position has a floating profit. BingX allows users to utilize floating profits in advance, which may result in using the floating profit (such as transferring funds out or opening new positions) while previous positions remain open, leading to a negative balance in the account. When closing positions, you need to compensate for the deficit. If the floating profit is less than the deficit, forced liquidation will be triggered.

Example:

A user transfers 100 USDT to the Standard Futures account and opens a position. At this point, the NAV is 100 USDT, the position margin is 100 USDT, and the available margin is 0 USDT. When a floating profit of 150 USDT is generated, the NAV becomes 250 USDT; the position margin is 100 USDT; the available margin is 150 USDT (The floating profit can be used). Then the user transfers out 150 USDT (Part of the floating profit is used). When the market goes down, the floating profit decreases to 50 USDT. The user transfers in 100 USDT for trading, the current floating profit is 50 USDT, and 150 USDT is transferred out. Thus, Net Asset Value = 100 + 50 - 150 = 0 USDT. In this case, forced liquidation is triggered despite the position having a floating profit.

It is recommended that users also monitor other account indicators to identify risks.

• Margin Rate: Pay attention when the margin rate is close to 0.
• Net Asset Value: Pay attention when the net asset value is significantly smaller than the floating profit.

Note: BingX will be sending you forced liquidation notifications via SMS and Message Center. This function serves as a risk warning and does not guarantee timely delivery. You agree that during your use of the Service, there may be certain circumstances (such as personal network congestion or a poor network environment) that could result in users being unable to receive or experiencing delays in receiving SMS reminders.