Debt Ratio and Liquidation

Debt Ratio

KuCoin offers two margin trading modes: Cross Margin and Isolated Margin. Cross Margin supports up to 5x leverage, while Isolated Margin supports up to 10x. Both are adjusted differently based on your debt ratio.

Your debt ratio is updated every 5 seconds. You'll receive warning alerts if it exceeds 95%, and forced liquidation occurs at 97%. Your current debt ratio can be seen on both the Margin Account and Margin Trading web and app pages.

 

Mode

Leverage Multiplier Initial Debt Ratio (Excluding Interest) Alerts at Liquidation at Debt Ratio for Outward Transfers
Cross Margin 1-5x 80% 95% 97% ≤ 60%
Isolated Margin 1-10x 90% 95% 97% ≤ 60%

 

 

Debt.png

Note: Assets can only be transferred out of the Margin Account if your debt ratio is below 60%. The lower the ratio, the more assets can be transferred. To move all of your assets, check your respective margin account details and clear all liabilities first.

 

Liquidation

This occurs when the mark price of your position's assets changes, causing the debt ratio to reach 97%. When forced liquidation is triggered, your held assets in the Margin Account will be sold (liquidated) to repay debts.

 

Process:

1. Liquidation is triggered when the margin account's debt ratio equals or exceeds 97%.

2. Upon Liquidation:

2.1 Warning Alerts: You'll receive alerts via email, SMS, or platform notifications, depending on your account settings.

2.2 Restrictions

i. Placing new orders is not allowed (regardless of trading pair).

ii. Any unfulfilled orders for all trading pairs are automatically canceled.

iii. During the liquidation process, any transfer of funds into the Margin Account is unavailable.

3. After liquidation occurs, the system takes control of and liquidates all positions to repay your debts. Any remaining balance, after deducting a fee (about 1% of the total position value) to cover negative balance risks, is returned in USDT or the liquidated token.

 

Important Reminders:

1. The debt ratio is calculated using the mark price.
2. Margin trading involves high market risk, which can amplify both gains and losses. Past profits do not guarantee future returns. Extreme price fluctuations may lead to the total liquidation of your assets. The information provided here is solely to inform, and not meant to be taken as financial or investment advice. You are responsible for your own trading strategies and the risks they entail. KuCoin is not liable for losses incurred through margin trading.

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