Debt Ratio and Liquidation

What Is the Debt Ratio? 

The Debt Ratio will be refreshed every second. When your debt ratio reaches 95%, the user's account will trigger an alert, and KuCoin will send an email warning based on your security settings. A forced liquidation will be triggered when the debt ratio reaches 97%. You may obtain the current debt ratio data on the margin account page and margin trading page, regardless of whether you visit our website or use our app.

 

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%

 

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Note: You can only transfer part of your funds from the margin account if the Debt Ratio is below 60%. If you'd like to transfer all your funds out, kindly check the Liabilities in your margin assets page and repay all the loans first.

When Does the Liquidation Occur?

A forced liquidation will be triggered when the mark price of your holding assets and debt assets changes, resulting in the debt ratio reaching 97%. All the assets you hold at the margin account will be sold as debt assets to repay all the debts.

1. When the debt ratio in the margin account reaches the Debt Ratio of Forced Liquidation, forced liquidation is triggered.

2. When the liquidation is triggered:

  • Liquidation notification: based on the security settings of your account, the system will notify you by Email/Station Alert.
  • Operation limitation
    • You're unable to place an order, no matter which margin trade pair it is.
    • All the trading pairs in your margin trading account will be canceled automatically if they are not fulfilled.
    • Transferring funds into the margin trade account will be unavailable during the liquidation period.

3. After the forced liquidation occurs, the system will take over the positions to close and repay the debts. If there are residual balances, one small part of fees (about 1% of the total positions value) will be charged to protect against the risks of negative balances; the others will be returned to users’ accounts in USDT or liquidated tokens. 

Please Note:

  1. Mark Price will be used to calculate the Debt Ratio.
  2. Margin trading is an activity with high market risk. While it may magnify gains, it may also magnify losses for you. Realized profits in the past are not indicative of returns in the future. Violent price fluctuations may result in the liquidation of all your assets. The information provided here should not be considered financial or investment advice. All trading strategies are at your own discretion and risk. KuCoin does not assume any responsibility for any losses caused when margin trading. 
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