Overview
Liquidation Process
Liquidation Price Calculations
USDT Perpetual and Expiry Contracts
Inverse Perpetual and Expiry Contracts
USDC Perpetual Contracts
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.
In the Isolated Margin mode, each position is managed independently, with its own allocated margin. Liquidation occurs when the Mark Price reaches the position's liquidation price.
The Isolated Margin mode supports both the One-Way mode and the Hedge mode (USDT-Perp Only). For more information on margin calculation methods, please refer to the Margin Calculations under Different Margin Mode.
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Differences Between the Margin Modes Under the Unified Trading Account
Liquidation Process
In the Isolated Margin mode, liquidation will be triggered when the Mark Price hits the position’s Liquidation Price. Liquidation of one position will not affect the other position.
When a position is at risk of liquidation, Bybit uses a laddered approach to reduce the required maintenance margin and avoid full liquidation. Here's how it works:
If the Risk Limit Tier is at the Lowest Tier:
1. Cancel Active Orders: The system cancels all orders that would increase the position size, freeing up margin to help save the position.
2. Close Position: If the position still doesn't meet the maintenance margin requirement, it will be liquidated and closed at the bankruptcy price.
If the Risk Limit Tier is Above the Lowest Tier:
1. Cancel Active Orders: The system cancels all orders that would increase the position size, freeing up margin while keeping the position intact.
2. Partial Close: The system will partially close the position by submitting a Immediate-Or-Cancelled (IOC) order of the difference between the current position value and the lower margin tier value.
3. Close Position: If the position still doesn't meet the maintenance margin requirement, it will be liquidated and closed at the bankruptcy price.
Important Note:
Liquidation is triggered by the Mark Price, not the Last Traded Price (LTP). As a result, the liquidation price may not always be visible on the default candlestick chart, which displays the Last Traded Price by default.
To learn how to display the Mark Price on the chart and monitor your liquidation price more accurately, please refer to this article.
Liquidation Price Calculations
Below are liquidation price calculations for available Futures contracts under the Isolated Margin mode.
USDT Perpetual and Expiry Contracts
Formulas
For Buy/Long:
Liquidation Price (Long) = [(Entry Price × Position Size) − (Entry Price × Position Size ÷ Leverage) − (Extra Margin Added ÷ ( 1 − Taker Fee Rate)) − MM Deduction] ÷ [Position Size − (Position Size × MM Rate)]
For Sell/Short:
Liquidation Price (Short) = [(Entry Price × Position Size) + (Entry Price × Position Size ÷ Leverage) + (Extra Margin Added ÷ ( 1 + Taker Fee Rate)) + MM Deduction] ÷ [Position Size + (Position Size × MM Rate)]
Notes:
— The Maintenance Margin Rate (MMR) is based on the risk limit tier. For more details please refer to Maintenance Margin (USDT Perpetual and Expiry Contracts).
— Minor differences from the actual liquidation price may arise due to the fees to close the position(s).
Example
Trader A initially placed a long entry of 1 BTC at 40,000 USDT with 50x leverage. Subsequently, he manually added 3,000 USDT more to his position margin. Assuming the maintenance margin rate is 0.5% and the taker fee rate is 0.0550%. The new Liquidation Price after the margin is added will be calculated as follows:
Position Value = 1 x 40,000 = 40,000 USDT
Fee to Close = 1 x 40,000 × (1 − 1 ÷ 50) × 0.055% = 21.56 USDT
Initial Margin = (40,000 ÷ 50) + 21.56 = 821.56 USDT
Maintenance Margin = (40,000 x 0.5%) − 0 + 21.56 = 221.56 USDT
Liquidation Price = [(40,000 × 1) − (40,000 × 1 ÷ 50) − (3,000 ÷ ( 1 − 0.0550%)) − 0] ÷ [1 − (1 × 0.5%)] = 36,380.25 USDT
Inverse Perpetual and Expiry Contracts
Formulas
For Buy/Long:
Liquidation Price (Long) = [Position Size × (MM Rate + 1)] ÷ [(Position Size ÷ Entry Price) + (Position Size ÷ Entry Price ÷ Leverage) + (Extra Margin Added ÷ ( 1 + Taker Fee Rate)) + MM Deduction]
For Sell/Short:
Liquidation Price (Short) = [Position Size × (1 − MM Rate)] ÷ [(Position Size ÷ Entry Price) − (Position Size ÷ Entry Price ÷ Leverage) − (Extra Margin Added ÷ ( 1 − Taker Fee Rate)) − MM Deduction]
Notes:
— The Maintenance Margin Rate (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 B has placed a BTCUSD short position of 30,000 USD with 10x leverage at a price of 60,000 USD. Assuming the taker fee rate is 0.0550% and the Maintenance Margin Rate (MMR) is 0.5% with no extra margin added:
Position Value = 30,000 ÷ 60,000 = 0.5 BTC
Fee to Close = 30,000 ÷ 60,000 × (1 − 1 ÷ 10) × 0.055% = 0.0002475 BTC
Initial Margin = (0.5 ÷ 10) + 0.0002475 = 0.0502475 BTC
Maintenance Margin = (0.5 x 0.5%) − 0 + 0.0002475 = 0.0027475 BTC
Liquidation Price (LP) = [30,000 × (1 − 0.5%)] ÷ [(30,000 ÷ 60,000) − (30,000 ÷ 60,000 ÷ 10) − (0 ÷ ( 1 − 0.055%)) − 0] = 66,333.33 USD
USDC Perpetual Contracts
Formulas
For Buy/Long:
Liquidation Price (Long) = [( Entry Price × Position Size) − ( Entry Price × Position Size ÷ Leverage) − (Extra Margin Added ÷ ( 1 − Taker Fee Rate)) − MM Deduction] ÷ [Position Size − (Position Size × MM Rate)]
For Sell/Short:
Liquidation Price (Short) = [( Entry Price × Position Size) + ( Entry Price × Position Size ÷ Leverage) + (Extra Margin Added ÷ ( 1 + Taker Fee Rate)) + MM Deduction] ÷ [Position Size + (Position Size × MM Rate)]
Notes:
— The Maintenance Margin Rate (MMR) is based on the risk limit tier. For more details please refer to Maintenance Margin (USDC Perpetual Contracts).
— Minor differences from the actual liquidation price may arise due to the fees to close the position(s).
The liquidation price calculation for USDC Perpetual contracts under the Unified Trading Account isolated margin mode is similar to that of USDT Perpetual. However, please note that there is a Session Settlement Mechanism for USDC Perpetual contracts, in which the average entry price will be updated to the Mark Price at the time of settlement.
Following a session settlement, the average entry price will be updated. This new price will be used to recalculate both the fee to close and the maintenance margin. However, under the USDC Perpetual isolated margin mode, the initial margin displayed in the position tab will remain unchanged. Any difference between the old and new fee to close, as well as any session realized profit & loss (P&L), will be added to the initial margin.
Trader B has opened a 1 BTCUSDC short position with an entry price of 10,000 USDC and 10x leverage. Assuming the maintenance margin rate is 0.4% and the taker fee rate is 0.0550%. The liquidation price is calculated as follows:
Position Value = 1 x 10,000 = 10,000 USDC
Fee to Close = Position Value x (1 + 1 ÷ Leverage) x Taker Fee Rate
= (1 x 10,000) x (1 + 1 ÷ 10) x 0.0550% = 6.05 USDC
Initial Margin = Position Value x (1 ÷ Leverage) + Fee to Close
= (1 x 10,000) x (1 ÷ 10) + 6.05 = 1,006.05 USDC
Maintenance Margin = 10,000 x 0.4% + 6.05 = 46.05 USDC
Liquidation Price = [(10,000 × 1) + (10,000 × 1 ÷ 10) + (0 ÷ ( 1 + 0.0550%)) + 0] ÷ [1 + (1 × 0.4%)] = 10,956.1753 USDC
At 4PM UTC settlement time, the mark price at settlement time is 9,900 USDC and the realized P&L for the current settlement cycle is 100 USDC [(10,000 USDC − 9,900 USDC) x 1].
During this time, the new average entry price will be updated to 9,900 USDC and used to calculate the new fee to close and maintenance margin. However, the initial margin needed is still calculated using the initial position entry price of 10,000 USDC.
The liquidation price as of 4PM UTC is calculated as follows:
Fee to Close = New Position Value x (1 + 1 ÷ Leverage) x Taker Fee Rate
= (1 x 9,900) x (1 + 1 ÷ 10) x 0.0550% = 5.9895 USDC
Initial Margin = Initial Position Value x (1 ÷ Leverage) + New Fee to Close
= 10,000 x (1 ÷ 10) + 5.9895 = 1,005.9895 USDC
Maintenance Margin = 9,900 x 0.4% + 5.9895 = 45.5895 USDC
Liquidation Price = [(9,900 × 1) + (9,900 × 1 ÷ 10) + (100 ÷ ( 1 + 0.055%)) + 0] ÷ [1 + (1 × 0.4%)] = 10,946.16 USDC