When using leverage in futures trading on LBank, if your account's maintenance margin ratio is insufficient to sustain your positions, it may lead to forced liquidation by the system. Forced liquidation closes your positions to prevent losses from exceeding your account balance. This guide focuses on the maintenance margin ratio as the sole trigger for forced liquidation and provides simple formulas and examples to help you better manage risks.
Key Terms & Formulas
Maintenance Margin Ratio (MMR,Trigger for Forced Liquidation)
- What It Is 👉The maintenance margin ratio represents the proportion of the maintenance margin relative to the margin balance. It is the sole factor used by LBank to determine whether forced liquidation or partial position reduction (Automatic Deleveraging, ADL) is triggered. If the ratio reaches or exceeds 100%, your position may be closed.
- Why It Matters 👉Unlike the estimated liquidation price, which is for reference only, the maintenance margin ratio determines whether a position can be maintained. Keeping this ratio below 100% is crucial to avoid forced liquidation.
- Risk Levels:
- Low Risk: 0% < Ratio < 50%, sufficient margin balance, green.
- Medium Risk: 50% ≤ Ratio < 80%, margin balance still sustainable, orange.
- High Risk: 80% ≤ Ratio < 100%, margin balance nearing critical levels, red.
- Forced Liquidation: Ratio ≥ 100%, displayed as "Forced Liquidation," red.
Formula：
| Maintenance Margin Ratio = (Maintenance Margin / Margin Balance) × 100% |
Maintenance Margin:
- What It Is 👉The maintenance margin is the minimum amount of funds required to maintain a position, calculated based on the position size and the corresponding maintenance margin rate tier. Larger position sizes correspond to higher maintenance margin rates, increasing the required maintenance margin.
- Tiered Example:
⚠️ Maintenance Margin Quick Calculation(MMQC): LBank calculates this based on the position size tier, as detailed in the tiered example below.
| Position Size | MMR | MMQC |
| ≤ 50,000 USDT | 1% | 0 USDT |
| 50,001 ~ 100,000 USDT | 2.0% | 200 USDT |
| 100,001 ~ 500,000 USDT | 3.0% | 800 USDT |
Formula
| Maintenance Margin = (Mark Price × Position Size × Maintenance Margin Ratio - Maintenance Margin Quick Calculation Amount) × (Position Size / Total Size of All Futures Positions) |
Example - Isolated Margin Mode
| Futures Trading Pair | BTCUSDT |
| Mark Price | 110,000 USDT |
| Entry Price | 100,000 USDT |
| Position Size | 0.1 BTC |
| Leverage | 10x |
| Isolated Margin Balance | 3,000 USDT |
| Maintenance Margin Ratio(MMR) | 2% |
| Maintenance Margin Quick Calculation Amount(MMQC) | 200 USDT |
| Futures Direction | Long（+1） |
Calculation
|
1) Maintenance Margin = (110,000 × 0.1 × 0.02 - 200) × (0.1 / 0.1) = (220 - 200) = 20 USDT 2) Maintenance Margin Ratio = 20 / 3,000 = 0.00667 ≈ 0.01% 3) Risk Level: Low Risk (Green) |
Example - Cross Margin Mode
| Futures #1 | Futures #2 | |
| Futures Trading Pair | BTCUSDT | ETHUSDT |
| Mark Price | 110,000 USDT | 4,000 USDT |
| Entry Price | 100,000 USDT | 3,800 USDT |
| Position Size | 0.3 BTC | 5 ETH |
| Maintenance Margin Ratio(MMR) | 3% | 2% |
| Maintenance Margin Quick Calculation Amount(MMQC) | 800 USDT | 200 USDT |
| Futures Direction | Long（+1） | Short（-1） |
| Cross Margin Balance | 6,000 USDT | |
| Total Isolated Margin Occupied | 1,000 USDT | |
Calculation
|
1) BTCUSDT Maintenance Margin = (110,000 × 0.3 × 0.03 - 800) × (0.3 / 0.3) = 990 - 800 = 190 USDT 2) ETHUSDT Maintenance Margin = (4,000 × 5 × 0.02 - 200) × (5 / 5) = 400 - 200 = 200 USDT 3) Maintenance Margin Ratio in Cross Margin Mode = 190 / (6,000 - 1,000) = 0.038 ≈ 0.04% 4) Risk Level: Low Risk (Green) |
💡Explanation：
- In cross margin mode, all positions share a margin balance of 5,000 USDT (6,000 - 1,000).
- The quick calculation reduces the maintenance margin, reflecting tiered risk adjustments.
- The ETHUSDT futures direction is short (-1), which does not affect the maintenance margin calculation but impacts unrealized profit/loss and the estimated liquidation price.
Margin Balance
- What It Is 👉The margin balance is the total amount of funds available to maintain positions.
Formula
| Isolated Margin Mode | Isolated Margin Balance = Isolated Margin Occupied + Isolated Unrealized Profit/Loss |
| Cross Margin Mode | Cross Margin Balance = Account Balance - Total Isolated Margin Occupied + Total Cross Margin Unrealized Profit/Loss |
Unrealized Profit/Loss
- What It Is 👉 Unrealized profit/loss reflects the current profit or loss of a position, calculated based on Mark Price and Entry Price.
Formula
| Long Positions | Unrealized Profit/Loss = (Mark Price - Entry Price) × Position Size |
| Short Positions | Unrealized Profit/Loss = (Entry Price - Mark Price) × Position Size |
Based on the above example, the calculation results are as follows:
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👉 BTCUSDT (Cross Margin)
👉 ETHUSDT (Isolated Margin)
|
Estimated Forced Liquidation Price (For Reference Only)
- What It Is 👉The estimated forced liquidation price is the price at which a position may face liquidation risk based on current funds. It is for reference only, as actual liquidation depends on the maintenance margin ratio.
Example - Isolated Margin Mode
| Futures Trading Pair | BTCUSDT |
| Account Balance | 3,000 USDT |
| Entry Price | 100,000 USDT |
| Mark Price | 110,000 USDT |
| Position Size | 0.1 BTC |
| Futures Direction | Long（+1） |
| Maintenance Margin Ratio(MMR) | 2% |
| Maintenance Margin Quick Calculation Amount(MMQC) | 200 USDT |
Formula
|
Estimated Forced Liquidation Price = [Isolated Margin Balance + Maintenance Margin Quick Calculation Amount - Futures Direction × Position Size × Entry Price] / [Position Size × Maintenance Margin Rate - Futures Direction × Position Size] |
Calculation
|
1) Estimated Forced Liquidation Price = [3,000 + 200 - (+1) × 0.1 × 100,000] / [0.1 × 0.02 - (+1) × 0.1] = (3,000 + 200 - 10,000) / (0.002 - 0.1) = -6,800 / -0.098 ≈ 69,387.76 USDT 2) Maintenance Margin = (110,000 × 0.1 × 0.02 - 200) × (0.1 / 0.1) = 220 - 200 = 20 USDT 3) Maintenance Margin Ratio = 20 / 3,000 = 0.00667 ≈ 0.01% |
💡Explanation
- A maintenance margin ratio of 0.01% indicates the position is currently at low risk (<50%). If the unrealized profit/loss decreases due to a price drop (e.g., margin balance falls to 400 USDT), the ratio may reach 100%, triggering forced liquidation.
- The estimated forced liquidation price is approximately 69,387.76 USDT, indicating that if the mark price falls to this level, the position may face liquidation risk, but actual liquidation depends on the maintenance margin ratio.
Example - Cross Margin Mode
| Futures Trading Pair | BTCUSDT |
| Account Balance | 6,000 USDT |
| Total Isolated Margin Occupied | 1,000 USDT |
| Cross Margin Unrealized Profit/Loss | 3,000 USDT |
| Entry Price | 100,000 USDT |
| Mark Price | 110,000 USDT |
| Position Size | 0.3 BTC |
| Futures Direction | Long（+1） |
| Maintenance Margin Ratio(MMR) | 3% |
| Maintenance Margin Quick Calculation Amount(MMQC) | 800 USDT |
Formula
|
Estimated Forced Liquidation Price = [Account Balance - Total Isolated Margin Occupied + Total Cross Margin Unrealized Profit/Loss + Maintenance Margin Quick Calculation Amount × Position Size / ∑ All Position Size for Futures 1 - Futures Direction × Position Size × Entry Price] / [Position Size × Maintenance Margin Ratio - Futures Direction × Position Size] |
Calculation
|
1) Estimated Forced Liquidation Price = [6,000 - 1,000 + 3,000 + 800 × 0.3 / 0.3 - (+1) = (6,000 - 1,000 + 3,000 + 800 - 30,000) / (0.009 - 0.3) = -21,200 / -0.291 ≈ 72,852.23 USDT 2) Maintenance Margin = (110,000 × 0.3 × 0.03 - 800) × (0.3 / 0.3) = 990 - 800 = 190 USDT 3) Maintenance Margin Ratio = 190 / (6,000 - 1,000) = 0.038 ≈ 0.04% |
💡 Explanation
- A maintenance margin ratio of 0.04% indicates the position is currently at low risk (<50%). If the unrealized profit/loss decreases due to a price drop (e.g., margin balance falls to 400 USDT), the ratio may reach 100%, triggering forced liquidation.
- The estimated forced liquidation price is approximately 72,852.23 USDT, indicating that if the mark price falls to this level, the position may face liquidation risk, but actual liquidation depends on the maintenance margin ratio.
🔔Reminder
- Maintain the maintenance margin ratio below 100% by adding funds or reducing position size to lower liquidation risk.
- Closely monitor market prices to ensure they remain above the estimated liquidation price.
What Happens During Forced Liquidation?
When the maintenance margin ratio reaches or exceeds 100%, LBank’s system will take the following actions:
- Cancel Unfilled Orders: All unfilled orders for the position will be canceled.
- Restriction on Asset Transfers: Assets in the futures trading account cannot be transferred to other accounts.
- Prohibition of Manual Liquidation: Traders cannot manually close positions during system-forced liquidation.
- Stepwise Forced Liquidation Mechanism: To minimize market impact, LBank adopts a stepwise liquidation process:
- The system gradually liquidates part of the position until the margin balance exceeds the maintenance margin.
- If partial liquidation fails, the entire position will be closed.
Key Differences Between Margin Modes
| Isolated Margin Mode |
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| Cross Margin Mode |
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Tips for LBank Traders
- Cross Margin Risk Warning: In cross margin mode, all positions share a single margin pool. Forced liquidation of one position may affect other positions. Closely monitor your maintenance margin ratio on the LBank futures trading platform.
- Isolated Margin Isolation: In isolated margin mode, forced liquidation only affects the specific position, leaving other positions unaffected.
- Mark Price Protection: LBank uses the mark price for liquidation calculations to ensure fairness and reduce unnecessary forced liquidations.
- Leverage Management: Higher leverage increases the maintenance margin ratio, elevating liquidation risk. Adjust leverage prudently and monitor positions.
- Set Stop-Loss/Take-Profit: Use stop-loss functions to exit losing positions early and avoid forced liquidation.
- App Updates:If you encounter issues opening positions, ensure the LBank App is updated to the latest version.
⚠️ Note
- In case of translation discrepancies, the English version prevails.