How are Margin Trading Liquidations Triggered on Bitget EU?

[Estimated Reading Time: 5 mins]

This article explains how liquidation is triggered in Bitget EU Margin Trading, including the key formulas, risk thresholds, liquidation flow, and how to manage your margin account to avoid forced liquidation. It covers both Cross Margin and Isolated Margin modes in detail.

What is Liquidation in Margin Trading?

Liquidation occurs when your margin level falls below the required maintenance threshold due to market volatility, high leverage, or a drop in collateral value.

When this happens, Bitget EU automatically cancels open orders and sells assets in your margin account to repay borrowed funds and prevent further losses.

Margin account types

Margin accounts can be used to borrow funds and trade with leverage. These accounts include collateral assets, borrowed funds, interest, and margin settings.

Margin Level vs Margin Ratio

Bitget EU uses two main metrics to assess your risk level in margin trading:

Margin Level (used for liquidation)

Formula: Margin Level = (Total Liabilities × Maintenance Margin Ratio) ÷ Net Assets

• Maintenance Margin Ratio (MMR)

• Cross Margin: Fixed at 10%

• Isolated Margin: Tier-based depending on the borrowed amount and trading pair

• You can view isolated margin MMR details here

When margin level reaches or exceeds 1.0, liquidation is triggered. At 0.8, a margin call is issued.

Margin Ratio (used for account health)

Formula: Margin Ratio = Net Assets ÷ Total Liabilities

This shows the general health of your margin account but is not used for liquidation thresholds.

Maintenance Margin Ratio (MMR)

The MMR helps determine how much collateral must be maintained to keep your position open.

Risk Thresholds and System Action

Example calculation

• Total Liabilities: $7,000

• Maintenance Margin Ratio: 10%

• Net Assets: $10,000

Margin Level = (7,000 × 0.10) ÷ 10,000 = 0.07 (7%)

This account is in a healthy state, with no risk of margin call or liquidation.

Liquidation Process

When the margin level reaches 1.0 or higher, the following process is triggered:

1. Cancel open orders

• In isolated margin: cancels orders in the affected pair

• In cross margin: cancels all margin orders

2. Repay debt using available assets

• First, the system uses assets in the same currency as the loan

• If those are insufficient, other coins will be sold based on largest available balance

3. Apply slippage

• Liquidation orders are executed at market price

• Actual execution prices may differ due to slippage, especially in low-liquidity markets

4. Restrict account actions

• While liquidation is ongoing, you cannot place orders, transfer, repay, or borrow using affected assets

5. Complete liquidation

• The system stops once the margin level is restored to 0.5 or lower

Close Position: Manual Loan Repayment Feature

Before reaching liquidation, you can use the Close Position feature to repay loans manually:

• Repayment begins with same-currency coins

• If not enough, other available coins will be sold at market price

• Open orders are canceled

• Related trading and transfers are temporarily restricted

This feature gives you control over repayments and helps you avoid forced liquidation.

How to Avoid Liquidation?

Follow these strategies to reduce your risk:

1. Monitor your margin level and ratio regularly

2. Add collateral by transferring more assets into your margin account

3. Repay your loan partially or in full to reduce liabilities

4. Adjust your leverage lower during volatile market conditions

5. Use stop-loss orders to prevent large losses

6. Understand tiered margin requirements for isolated margin trading

FAQs

1. What happens to my assets after liquidation?

They are sold to repay borrowed funds and accrued interest. Any remaining balance remains in your account.

2. Are liquidation fees charged?

2% liquidation fee is applied to the total liquidation amount.

3. Will I get a warning before liquidation?

Yes. Bitget EU issues a margin call alert when your margin level reaches 0.8.

4. Can I stop liquidation manually?

Yes. You can repay your loan or close positions before your margin level reaches 1.0.

5. How is slippage handled during liquidation?

Slippage is the difference between expected and actual execution prices when selling assets at market. Higher slippage may occur in volatile or low-liquidity conditions.

Disclaimer and Risk Warning

All trading tutorials provided by Bitget EU are for educational purposes only and should not be considered financial advice. The strategies and examples shared are for illustrative purposes and may not reflect actual market conditions. Cryptocurrency trading involves significant risks, including the potential loss of your funds. Past performance does not guarantee future results. Always conduct thorough research, understand the risks involved. Bitget EU is not responsible for any trading decisions made by users.