1. Overview

2. Liquidation Process

3. Liquidation Price Calculation

4. Spot Trading Rules

5. References

Overview

Bybit's Unified Trading Account (UTA) supports three margin modes: Isolated Margin, Cross Margin, and Portfolio Margin. Each mode has distinct liquidation processes that are important in managing your trading risk.

Under the Cross Margin mode, all available margin within your Unified Trading Account (UTA) is shared across positions and orders. Profits and losses from one position may offset the margin requirements of another, helping improve capital efficiency.

Liquidation risk is assessed at the account level. The system continuously monitors your Account Initial Margin Rate (IMR) and Account Maintenance Margin Rate (MMR) to ensure sufficient margin is available to support your positions.

In the Cross Margin mode, both the One-Way mode and the Hedge mode are supported. While both modes use the same methodology to calculate Account IMR and Account MMR, the initial margin calculations to open positions differ. For more details, please refer to Margin Calculations Under Different Margin Modes.

Liquidation Process

As the account risk increases, the system may apply different risk control measures before liquidation occurs.

Initial Margin Rate (IMR)

When your Account IMR ≥ (Selected Leverage − 1 ÷ Selected Leverage), additional margin borrowing will no longer be available.

When your Account IMR ≥ 100%, the following restrictions will apply:

1. Active Options orders will be canceled.
2. Existing Spot, Perpetual, and Expiry orders will remain active.
3. New Derivatives orders that require additional margin cannot be placed.
4. Assets with a higher collateral value ratio cannot be converted into assets with a lower collateral value ratio.

Maintenance Margin Rate (MMR)

When your Account MMR = 100%, the system will begin reducing account risk through a series of protective actions:

Step 1: Cancel Active Orders

1. Derivatives - All orders increasing position size (including Buy Options) are canceled.
2. Spot - Cancel Spot Margin orders with liability or with haircut loss, i.e., orders that buy lower collateral value assets with higher ones.

Step 2: Auto Repayment

Auto repayment will be triggered if there are liabilities in your UTA, according to the process stated here. (View the liquidity order of margin assets).

Step 3: Cancel All Orders.

Step 4: Close Fully Hedged Position (Hedge Mode)

This step will only be applied to fully hedged positions in Hedge mode. The fully hedged positions will be settled at the Mark Price to free up the margin. If there are multiple fully hedged positions, the sequence of liquidation will be based on the contract liquidity order stated below.

Step 5: Liquidation of Unhedged Position

The system will calculate the amount of margin that needs to be released to reduce the MMR to ≤ 100%. Then, according to the liquidity order of the trading pairs, determine positions to reduce risk limit tiers based on liquidity order to release the required margin amount through liquidation.

Step 6: Liquidation of Short Options Position

If account MMR remains at 100% or above, all short Options positions will be liquidated, buy Options will not be liquidated in Cross Margin mode. The liquidation engine will prioritize orders that can be filled in the order book. If the liquidity of the order book is insufficient, Bybit will engage OTC Market Makers to square off the positions to reduce the MMR. In such cases, a liquidation fee is imposed.

Perpetual Positions are liquidated at the Bankruptcy Price — the price at which the position's losses equal its entire margin, resulting in a margin balance of zero. Any scenario in which the above steps result in bringing MMR to below 100% will halt the liquidation process, and further steps will not be executed.

(View the table in the References section below for the liquidity order of contracts).

When your Account MMR ≥ 160%, the liquidation engine will take over the position and the entire position will be liquidated. Buy Options will be excluded and will not be liquidated.

Please note that before the options position is taken over, low-collateral-value assets will be converted into high-collateral-value assets. After the conversion, if the Maintenance Margin Ratio (MMR) drops below 160%, the liquidation logic for MMR ≥ 100% will be triggered.

Liquidation Price Calculation

Under the Cross Margin Mode, all available margin within your Unified Trading Account (UTA) is shared across positions.

Unlike the Isolated Margin Mode, the liquidation price is not fixed. It changes dynamically based on:

1. Account Equity
2. Unrealized P&L
3. Open Positions
4. Maintenance Margin Requirement
5. Available Margin

As a result, the displayed liquidation price should be considered for reference only.

The liquidation price displayed on the trading page is calculated dynamically by the system based on the account's current equity, maintenance margin requirement, and open positions.

USDT Perpetual and Expiry Contracts

Illustration 1 (not accounting for fees)

Assuming Trader A wants to open a 2 BTC long position at 10,000 USDT with 100x leverage. The current available balance is 2,000 USDT.

Maintenance Margin = Maintenance Margin Rate x Order Value

= 2 × 10,000 × 0.5% = 100 USDT

To calculate the maintenance (liquidation) price level, we need to see what his current sustainable loss is.

The Total Sustainable Loss = Available Balance - Maintenance Margin

= 2,000 - 100 = 1,900 USDT

With 1,900 USDT, the position can sustain a price loss of 950 USDT (1,900 ÷ 2). Therefore, the liquidation price of this position would be 9,050 USDT (10,000 - 950).

Trader A accepts this risk level and opens the position. The initial margin of 200 USDT will be occupied from his available balance to open the position.

Initial Margin = Contract Quantity x Entry Price ÷ Leverage

= (2 × 10,000) ÷ 100 = 200 USDT

Available Balance = 1,800 USDT

Illustration 2

After some time, the price increases to 10,500 USDT, and Trader A’s position is at an unrealized profit of 1,000 USDT (500 × 2).

Total Sustainable Loss = Available Balance + Initial Margin - Maintenance Margin + Unrealized Profit

= 1,800 + 200 - 100 + 1,000 = 2,900 USDT

With 2,900 USDT, the position can sustain a price loss of 1,450 USDT (2,900 ÷ 2). The liquidation price of this position would be 9,050 USDT (10,500 - 1,450).

Using the above logic, we can derive the liquidation price formula as below.

Formulas

Position with unrealized profit

LP (Long) = [Entry Price - (Available Balance + Initial Margin - Maintenance Margin)] ÷ Net Position Size

LP (Short) = [Entry Price + (Available Balance + Initial Margin - Maintenance Margin)] ÷ Net Position Size

Position with an unrealized loss

LP (Long) = [Current Mark Price - (Available Balance + Initial Margin - Maintenance Margin)] ÷ Net Position Size

LP (Short) = [Current Mark Price + (Available Balance + Initial Margin - Maintenance Margin)] ÷ Net Position Size

Note: Minor difference from the actual liquidation price may arise due to the fees to close the position(s).

Examples

Below are some examples of liquidation price calculation under the Cross Margin mode (not accounting for fees).

Example 1 (Perfectly hedge)

A Perfect hedge will only be formed under the same symbol with the same contract quantity in Cross Margin mode. For example, a trader holds 1 BTC of BTCUSDT long position and 1 BTC of BTCUSDT short position under Cross Margin mode.

A perfectly hedged position will never be liquidated as the unrealized profit for one position will be used to compensate for the unrealized loss of the other position.

Example 2 (Partially hedged position)

Assuming Trader B is holding two positions using the leverage of 100x as follows and the current available balance is 3,000 USDT. The current mark price is 9,500 USDT.

The short position will never be liquidated as the contract size of the long position is larger than that of the short position. Whenever the price increases, the unrealized profit for the long position is always greater than the unrealized loss for the short position.

For the long position, we only need to consider the net exposure of the position abs(Long - Short) = abs(2 BTC - 1 BTC) = 1 BTC when calculating the liquidation price.

Initial Margin = (1 × 10,000 ) ÷ 100 = 100 USDT

Maintenance Margin = 1 × 10,000 × 0.5% = 50 USDT

Available Balance = 3,000 USDT

LP (Long) = [9,500 - (3,000 + 100 - 50)] ÷ 1 = 6,450 USDT

Note: Under Cross Margin mode, the unrealized loss will reduce the available balance. Unrealized profit will have no effect on the available balance as Bybit does not support unrealized profit to open new orders, withdraw or compensate any unrealized loss for an unhedged position.

Example 3 (positions across different symbols)

Trader C currently holds the two positions below and the available balance is now 2,500 USDT.

For BTCUSDT position,

LP = 19,500 - (2,500+200-100) ÷ 1 = 16,900 USDT

For ETHUSDT position,

LP = 2,000 + (2,500 + 400 - 100) ÷ 10 = 2,280 USDT

Assuming that Trader C has opened another BITUSDT Short Position. The position details are as follows:

New Available Balance = 2,500 - 500 (extra unrealized loss from BTCUSDT long position) - 240 USDT (initial margin for BITUSDT) = 1,700 USDT

The new liquidation price for each position is calculated as follows:

For BTCUSDT long position,

LP = 19,000 - (1,700 + 200 -100) ÷ 1 = 17,200 USDT

For BITUSDT position,

LP = 0.6 + (1,700 + 240 - 60) ÷ 10,000 = 0.788 USDT

For ETHUSDT position,

LP = 2,000 + (1,700 + 400 - 100) ÷ 10 = 2,200 USDT

Based on the examples above, we can understand that when multiple positions are using the same asset (USDT) as margin under cross margin mode, the liquidation price of the profitable position will move closer to the Mark Price every time the unrealized loss of the losing position increases. This happens because the shared available balance is reduced after being used to cover the unrealized losses of the losing position. The unrealized profit will not increase the available balance as mentioned in Example 2.

When the available balance reaches 0, the Liquidation Price of both positions will not change any further as what is supporting the position now is the initial margin of the position, which is not shared between the positions.

The only exception is when there are funding fee deductions to the initial margin of position. This will only occur when the available balance is 0, and any further funding fee deductions will reduce the initial margin of the position. When this happens, the Liquidation Price of the position will be recalculated and moved closer to the Mark Price.

Inverse Perpetual and Expiry Contracts

Formulas

Buy/Long:

Liquidation Price (Long) = Contract Quantity ÷ [Position Value + (Initial Margin - Maintenance Margin) + Available Balance]

Sell/Short:

Liquidation Price (Short) = Contract Quantity ÷ [Position Value - (Initial Margin - Maintenance Margin) + Available Balance]

Notes:

— Position Value = Contract Quantity ÷ Average Entry Price

— Initial Margin = Position Value ÷ Leverage

— Maintenance Margin = (Position Value × MMR) - Maintenance Margin Deduction

— The MMR is based on the risk limit tier. For more details please refer to Maintenance Margin (Inverse Perpetual and Expiry Contracts).

— Minor differences from the actual liquidation price may arise due to the fees to close the position(s).

Example

Trader D opens a long position of 50,000 USD on the BTCUSD Perpetual at an entry price of 25,000 USD using 20x leverage. The trader has an available balance of 0.5 BTC in their account. The MMR is 0.5%.

Position Value = 50,000 ÷ 25,000 = 2 BTC

Initial Margin = 2 ÷ 20 = 0.1 BTC

Maintenance Margin = 2 × 0.5% - 0 = 0.01 BTC

Liquidation Price = 25,000 ÷ [2 + (0.1 - 0.01) + 0.5] = 9,652.50 USD

Spot Trading Rules

Under the Unified Trading Account, there are two (2) scenarios worth noting for Spot Margin trading:

1. The Spot Margin trading function is not enabled:

1. When the IMR exceeds 100%, it is not allowed to place an order to buy lower conversion rate assets with higher ones.
2. When there is a Derivatives position, the Spot order will comprehensively calculate the amount available for trading based on the available balance and collateral asset balance.

2. The Spot Margin trading function is enabled:

1. When the IMR reaches (Selected Leverage − 1 ÷ Selected Leverage), Spot margin orders cannot be placed.
2. When the MMR reaches 100%, margin assets will be sold to settle all liabilities.
3. When the IMR exceeds 100%, it is not allowed to place an order to buy lower conversion rate assets with higher ones.
4. When the available margin in your Unified Trading Account is more than zero, the user can automatically borrow and sell more amounts when placing an order.

​​​References

The liquidity order of trading pairs or margin assets is as follows:

Derivatives

1. In the event of liquidation, the Expiry position that is the nearest to the settlement date will be liquidated first.

Margin Assets

For the liquidity order for margin assets, please refer to here.