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.

The Portfolio Margin mode assesses risk across the entire portfolio, with liquidation triggered when the MMR reaches 100%. For more information on how margin is calculated in Portfolio Margin, please refer to Margin Calculations Under Different Margin Modes.

​​​​​​​Liquidation Process

As 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%, new positions that would increase margin cannot be placed.

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 All Orders

All orders will be canceled, regardless if it is open or closing orders, including TP/SL.

Step 2: Auto Repayment

Auto repayment will be triggered if there are liabilities in your UTA, according to the process stated here. Assets or borrowings involved in Spot Hedging will not be used for repayment or repaid. (View the liquidity order of margin assets).

Step 3: Liquidation of Assets involved in Spot Hedging and Derivatives Positions

If the account's MMR remains at 100%, the system will perform laddered liquidation by managing the user’s assets and positions in different currencies in the following order:

(A) Assets exclusively used for Perpetual contracts settled in USDC, Perpetual contracts settled in USDT, or Inverse Perpetual contracts settled in the respective base token.

(B) Assets outside of Category A are categorized under Category B, which includes spot, futures, and options investment portfolios. It's important to note that portfolios for USDC perpetual and USDT perpetual also fall under this category.

a. The system will prioritize liquidating the assets falling under category (A), according to the liquidity order of the trading pairs until the account's MMR ≤ 90%, or no more eligible currencies remain.

b. If a user’s assets fall under category (B), the system will sequentially evaluate each derivative's position to simulate the impact on the account's MMR after partially closing each Derivative position and selecting the position with the greatest reduction in MMR for liquidation.

c. If users have activated Spot Hedging, our liquidation simulation will also consider the combined impact of changes in Spot assets used for hedging after liquidating a Derivative position.

d. During the simulation process for positions falling under category (B), the quantity to be liquidated for each Derivative position will be determined based on the actual market liquidity condition. However, the maximum contract quantity to be liquidated will not exceed the position's opened quantity or the maximum order size per trade on the platform.

e. If we cannot identify a position that can effectively reduce the account's MMR during the liquidation simulation (considering an exceptionally good hedging portfolio), the liquidation process will be suspended. However, the system will continue attempting to identify suitable positions for liquidation until the account is taken over or the liquidation process ends.

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.

When your Account MMR ≥ 160%, the liquidation system will take over the Spot assets and Derivatives positions and liquidate the entire assets and position within your UTA.

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

Unlike Isolated Margin Mode, positions under Portfolio Margin Mode do not have a fixed liquidation price and therefore a liquidation price cannot be accurately calculated or displayed.

This is because Portfolio Margin uses a risk-based model that evaluates the overall risk exposure of the account rather than individual positions. The system continuously assesses factors such as open positions, hedging effects, asset correlations, mark prices, and market volatility to determine the account's risk level.

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.