How does liquidation work in futures trading?
When your maintenance margin ratio is less than or equal to 100%, the actual liquidation price will be calculated, and your position may be liquidated or partially reduced. The estimated liquidation price will change continuously, and the estimated liquidation price shown in your position is for reference only.
Open orders tie up margin won't affect the estimated liquidation price — they only cause the maintenance margin ratio to change. Before liquidation occurs, a position reduction is triggered first. At that point, your open orders are cancelled and the margin is released.
To improve market stability and reduce unnecessary liquidations during abnormal price movements, the liquidation price is based on the mark price. You can view historical mark price trends by switching the candlestick chart. Liquidation affects only your trading account and does not impact your funding account.
What is maintenance margin requirement (MMR)?
The maintenance margin requirement is an indicator that reflects the safety level of a position. The higher the maintenance margin requirement, the safer the position.
Spot and futures mode + Cross margin trade
MMR= (Total balance of this asset in cross margin + Cross margin return - Pending sell order quantity of this asset - Required quantity of this asset for options buy orders - Required quantity of this asset for isolated margin positions - All maker fees) / (Maintenance margin + Liquidation fee).
Liquidation fee = Leverage borrowing fee + Expiry/Perpetual delivery fee + Options fee
Leverage borrowing fee = Borrowed position value * Customer's taker fee rate
Expiry/Perpetual delivery fee = Expiry/Perpetual position value * Customer's taker fee rate
Options fee = Options position value * Customer's taker fee rate
Multi-currency margin mode + Cross margin trade
MMR = Effective margin / (Maintenance margin + Deleveraging fee)
Maintenance margin = Amount of positions held + Open orders
Deleveraging fee = Amount of positions held + Open orders
Multi-currency margin mode + Isolated margin trade
MMR = (Margin Balance + return) / (Position Value * (position tiers Maintenance Margin Ratio + Fee Rate) )
Crypto-margined futures
MMR = (Margin Balance + Return) / (Face Value * |Number of Contracts| / Mark Price * (Position Tiers Maintenance Margin Ratio + Fee Rate))
USDT-margined
MMR= (Margin Balance + return) / (Face Value * | Number of Contracts | * Mark Price * (Position Tiers Maintenance Margin Ratio + Fee Rate))
Why are my positions liquidated or reduced?
Position reduction or forced liquidation is triggered when the maintenance margin ratio ≤ 100%: positions at tier 3 and above are partially reduced according to a tiered handling mechanism.
Are TP/SL prices and the liquidation price the same thing? Why was I forcibly liquidated even though I set a stop-loss?
No, they are not. A TP/SL order is a conditional order that you actively set — when the market/mark price reaches your trigger price, the system closes your position using a market or limit order as you specified. The liquidation price, on the other hand, is calculated in real time by the system based on your margin, position size, and maintenance margin ratio. It has no direct relationship to whether you've set a TP/SL order.
These are two independent mechanisms: if your maintenance margin ratio drops to ≤ 100% before the market price reaches your stop-loss trigger, the system will execute forced liquidation without waiting for your stop-loss order to be triggered. This commonly occurs in the following situations:
Market volatility is severe, and your stop-loss price is set too close to the liquidation price, causing forced liquidation to be triggered directly.
After setting your stop-loss, you withdrew part of your margin, causing the maintenance margin ratio to fall below the threshold prematurely.
Therefore, setting a stop-loss does not guarantee that your position won't be forcibly liquidated ahead of time. It is recommended that you regularly monitor the real-time maintenance margin ratio in your positions panel rather than relying solely on TP/SL orders.
When will liquidation be triggered?
When the maintenance margin ratio ≤ 100%, your account equity is no longer sufficient to cover the maintenance margin and potential liquidation fees, and the system will trigger forced liquidation. Please monitor your maintenance margin ratio at all times. After forced liquidation is triggered, the entire margin portion corresponding to that position is lost — not just the portion you would lose from a manual close.
Why does the amount deducted after forced liquidation differ from my expectation? How are liquidation costs stacked?
When forced liquidation occurs, the actual amount deducted is not equal to the loss you would have expected from a regular close or stop-loss order. It is the combined result of the following:
The actual realized loss on the position (calculated based on the mark price at the time of liquidation, which may differ from the loss corresponding to your set stop-loss price).
The forced liquidation fee.
Any accumulated unsettled funding fees prior to liquidation (if the position was held across a funding fee settlement time).
Does OKX still have a loss sharing mechanism for futures trading?
No, OKX no longer uses loss sharing mechanism. Instead, the platform uses an Auto-Deleveraging (ADL) mechanism.
What is ADL?
ADL is a risk-control mechanism used in extreme market conditions or force majeure events, when the risk reserve becomes insufficient or drops sharply. It is currently defined as a 30% straight-line decline from its peak within 8 hours but this threshold may be adjusted based on market conditions.
How does ADL work?
When ADL is triggered, liquidation and position reduction are no longer handled through the market order book. Instead, the system directly matches with the highest-priority counterparty and executes the reduction at the current mark price. The counterparty’s position is reduced, and the resulting profit or loss is credited to their account balance.
Notifications & records
If your position is auto-deleveraged, you will receive SMS and email notifications. You can also view the details in the report center, where the account history type is labeled auto-deleveraging
To learn more, click the link: Introduction to the Auto-deleveraging Mechanism
What is the risk reserve?
The Risk Reserve is a fund used by OKX to cover losses from forced liquidations and prevent bankruptcy risk.
It is funded by OKX and remaining margin from liquidation orders.
Risk reserves are kept separate by business line (margin, futures, perpetual swaps, and options), and also by futures and crypto within each line.
Every day at 16:00 (HKT), the platform settles profits and losses from forced reductions and liquidations from the past 24 hours and updates the risk reserve accordingly.