When a liquidation is triggered, the platform automatically closes your trades to prevent your account balance from going negative.
If your losses reduce your margin below the Maintenance Margin level, your position risks liquidation.
Liquidation Triggers
On Omni, a liquidation is triggered based on your Maintenance Margin Usage.
If your Maintenance Margin Usage goes to, or above, 100%, your position is at risk of being liquidated.
To ensure price stability and protect traders from sudden wicks from extreme, short-lived volatility, Omni calculates maintenance margin using a very fast EMA of the Mark Price.
Partial Liquidation Mechanism
Omni uses a system for Partial Liquidations to ensure that the system only liquidates the necessary quantity of a position required to bring your Maintenance Margin Usage back below 100%.
This approach ensures that you retain a portion of your position if the market stabilizes, rather than losing the entire position due to a single event.
Liquidation Causes
Several factors can lead to liquidations:
Unexpected price movements: When the Mark Price moves against your position, unrealized losses consume your posted margin.
Excessive leverage: Higher leverage provides you with a narrow price buffer. A small percentage move in the underlying asset can push a high-leverage account into liquidation levels.
Funding payments: Sustained funding payments can drain your available margin, especially if the position is already near the maintenance threshold.
Liquidation Price & Fees
When a liquidation is triggered, the trade is executed at the Liquidation Price, which includes a platform-wide penalty.
Liquidation Penalty: 0.5%
Longs: Force-closed at the Bid Price - 0.5%
Shorts: Force-closed at the Ask Price + 0.5%
Learn more about Liquidation Fees.