Introduction

This article explains how liquidation works, why it happens, and what factors influence your liquidation price on Coinlocally Futures.

How liquidation works

Liquidation occurs when your Margin Balance falls below the Maintenance Margin required to keep your position open.

Coinlocally uses Mark Price, not Last Traded Price (LTP), to trigger liquidation.

This prevents unfair liquidations caused by sudden price spikes or low liquidity.

Why liquidation happens

Liquidation may occur due to:

• Insufficient margin
• High leverage
• Funding fees reducing your position margin
• Market volatility
• Unrealized losses exceeding your available margin

Why liquidation may happen even with a Stop Loss

Stop Loss orders can use different trigger types (Mark Price or Last Price).

Liquidation always uses Mark Price, so liquidation can occur before your Stop Loss triggers.

Why the candlestick didn’t touch your liquidation price

Charts display LTP, but liquidation is based on Mark Price, which may differ.

Why liquidation happens despite having unrealized profit

In Cross Margin mode, all positions share the same margin.

Losses from other positions can reduce your Margin Balance below Maintenance Margin.

Why your liquidation price changes

Funding fees, wallet balance changes, and risk limit adjustments can move your liquidation price.

Additional notes

• Liquidation closes your position at the Bankruptcy Price.
• If the execution price is better than the bankruptcy price, the remaining margin goes to the Insurance Fund.
• If worse, the Insurance Fund covers the loss.

Common Issues

• Using high leverage significantly increases liquidation risk.
• Stop Loss using LTP may not trigger before liquidation.
• Funding fees can push your liquidation price closer to Mark Price.

feeling lost?

If you’re unsure why your position was liquidated, our support team can review your case and help you understand what happened.

Updated on: 01/13/2026