Contract liquidation refers to the contract system automatically closing a position when the account equity of a position (that is, the position value plus the available balance) falls below a certain liquidation threshold, in order to protect the interests of the trading platform and other users. The liquidation threshold is calculated based on the leverage multiplier of the position contract and the extent of contract price fluctuations. The following is the contract liquidation calculation method used by the Astral Exchange:
1. Liquidation Price for Long Positions
Formula:
Liquidation Price = (Opening Value − Initial Margin + Fees − Additional Margin) ÷ [(1 − Maintenance Margin Rate) × Contract Multiplier × Number of Contracts]
Where:
- Initial Margin = Contract Multiplier × Number of Contracts × Opening Price ÷ Leverage Multiplier (USDT)
- Opening Value = Opening Price × Contract Multiplier × Opening Quantity (USDT)
- Maintenance Margin Rate = Maintenance margin rate for the corresponding tier
Calculation Example
Assume that the multiplier of a BTC/USDT contract is 100, and that a trader opens 10 contracts of a long position at a price of 40,500 USDT with 10x leverage. Assume that the maintenance margin rate is 0.5%, the fee rate is 0.1%, and no additional margin is added.
Step 1: Calculate the initial margin
100 × 10 × 40,500 ÷ 10 = 4,050,000 USDT
Step 2: Calculate the opening value and example fee
Opening value = 40,500 × 100 × 10 = 40,500,000 USDT Fee = 40,500,000 × 0.1% = 40,500 USDT
Step 3: Substitute into the original long-position formula
Liquidation Price = (40,500,000 − 4,050,000 + 40,500 − 0) ÷ [(1 − 0.5%) × 100 × 10] ≈ 36,673.87 USDT
Therefore, in this example, if the account equity falls below the maintenance margin requirement, the position will be forcibly liquidated at a price of 36,673.87 USDT.
2. Liquidation Price for Short Positions
Formula:
Liquidation Price = (Opening Value + Initial Margin − Fees + Additional Margin) ÷ [(1 + Maintenance Margin Rate) × Contract Multiplier × Number of Contracts]
Where:
- Initial Margin = Contract Multiplier × Number of Contracts × Opening Price ÷ Leverage Multiplier (USDT)
- Opening Value = Opening Price × Contract Multiplier × Opening Quantity (USDT)
- Maintenance Margin Rate = Maintenance margin rate for the corresponding tier
Calculation Example
Assume that the multiplier of a BTC/USDT contract is 100, and that a trader opens 2 contracts of a short position at a price of 50,000 USDT with 10x leverage. Assume that the maintenance margin rate is 0.5%, the fee rate is 0.01%, and no additional margin is added.
Step 1: Calculate the initial margin
100 × 2 × 50,000 ÷ 10 = 1,000,000 USDT
Step 2: Calculate the opening value and example fee
Opening value = 50,000 × 100 × 2 = 10,000,000 USDT Fee = 10,000,000 × 0.01% = 1,000 USDT
Step 3: Substitute into the original short-position formula
Liquidation Price = (10,000,000 + 1,000,000 − 1,000 + 0) ÷ [(1 + 0.5%) × 100 × 2] ≈ 54,721.39 USDT
Therefore, in this example, if the market price rises to 54,721.39 USDT, the Astral Exchange will forcibly liquidate the position.
Main Variables in the Formula
| Variable | Meaning |
| Opening Price | The price when the position is established |
| Opening Value | The position value calculated based on the opening price, contract multiplier, and number of contracts; it is not the current position value |
| Initial Margin | The margin required to establish the position, calculated using the leverage multiplier in the example |
| Additional Margin | Margin additionally allocated to the position after it is opened |
| Maintenance Margin Rate | The rate for the corresponding contract and risk tier |
| Contract Multiplier, Number of Contracts | Parameters used to determine the size of the contract position |
| Fees | The fee item in the original formula; the specific fees included are subject to the platform's current rules |
It should be noted that the above calculation method is based on different contract modes, and the specific calculation method may vary by platform. In addition, the liquidation threshold changes dynamically and is continuously adjusted based on market price fluctuations. Therefore, it is necessary to promptly monitor contract liquidation information in order to make reasonable trading decisions.
Disclaimer:Astral reserves the right to make adjustments to and change the above contract liquidation calculation method at any time.