Liquidation management (Global Derivatives)

Liquidation can begin when your margin balance no longer covers the maintenance margin requirement. The liquidation engine attempts to reduce risk by reducing or closing positions. Liquidation does not guarantee that losses will stop before your balance becomes negative.

Trading with leverage amplifies both profits and losses which can lead to liquidation if the market rapidly turns against your position.

Margin ratio calculation

Margin ratio = (maintenance margin requirement ÷ margin balance) × 100.

For cross margin, this calculation applies to the shared cross-margin account. For segregated margin, it applies to the margin balance and requirement of the segregated position. At 100%, the maintenance margin requirement equals the margin balance, and the account or segregated position is at the liquidation threshold.

Close to liquidation

You may receive an in-app warning or email when your account approaches liquidation. Do not rely on receiving a warning before liquidation begins. When your margin balance falls below the initial margin requirement, risk-increasing open orders may be canceled and risk-increasing orders cannot be placed.

A higher margin ratio means less of a buffer against liquidation. Monitor your margin ratio and act before it reaches 100%.

How liquidation works

Global Derivatives uses incremental liquidation. The risk engine attempts to reduce risk until the account or segregated position again meets its maintenance margin requirement. Depending on market conditions, some or all positions may be affected.

Avoid liquidation

To reduce liquidation risk, consider canceling risk-increasing open orders, reducing your exposure, or adding collateral to the relevant cross-margin account or segregated position. These actions do not guarantee that liquidation will be avoided.

Close a position

In the Positions Blotter of any Derivatives market page, select a position and click the X to place a market order and close the position.