What's liquidation and how do I reduce the risk?
Liquidation happens when a position no longer has enough margin to meet the required maintenance level under platform risk rules.
In simple terms, if losses increase and your available margin becomes insufficient, the position may be liquidated to limit further losses.
What are the actions that can trigger liquidation?
Liquidation risk can increase due to:
adverse price movement
insufficient margin
high position size relative to account balance
funding payments and fees reducing available margin over time
volatility spikes
How do I reduce liquidation risk?
There's no way to eliminate risk completely, but you can reduce it by managing exposure more carefully.
Common risk-reduction practices include:
using smaller position sizes
adding margin (where appropriate and supported)
using isolated margin for clear position-level risk control
setting stop-loss / exit rules in advance
avoiding overconcentration in a single trade
monitoring funding rate impact on open positions
Important reminder: X-Perps can move quickly. A position can become risky faster than expected during high volatility. Monitor positions regularly and use risk controls that match your strategy and experience level.
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Disclaimer: X-Perps are leveraged derivatives. Leverage can amplify gains and losses. Losses may occur quickly and these products may not be suitable for all investors.