Debt Ratio=Account liability / Account assets, the indicator to rate risk of a forced liquidation, which indicates the ratio of borrowed assets to total assets of the account. The higher the debt ratio, the higher the loan ratio is, and the greater chance the margin account will be forced liquidation.
The Debt Ratio will be refreshed every 5 seconds when the user’s debt ratio reaches 80%, the user’s account will trigger a warning and KuCoin will send an SMS and email warning to the user based on the security settings. A forced liquidation will be triggered when the debt ratio reaches 90%.
Liquidation: A forced liquidation will be triggered when the token price changes resulting in all your assets slightly left or repaying the principal and interest. All of the positions of this pair are closed automatically to prevent further loss and ensure you do not default on your loan.
1. When the debt ratio in the margin account reaches 90%, forced liquidation is triggered.
2. When the liquidation triggered:
2.1 Liquidation notification: based on the security settings of your account, the system will notify you by Email/SMS/Station Alert.
2.2 Operation limitation
A. You’re not able to place any orders, no matter which margins trade pair it is.
B. All the trade pairs in your margin trade account will be canceled automatically if they are not full filled.
C. Transferring funds into the margin trade account will be unavailable during the liquidation period.
3. The funds in a margin trade account will be used to repay the principal and interest, liquidation will be ended if there are enough funds. If not, you will get into a negative balance.
- Mark Price will be used to calculate Debt Ratio.
- Under cross Margin, not all of your position will be liquidated if you hold more than one type of coin. The highest value of your coins estimated in BTC will be liquidated until the debt ratio is lower than 95%.