Dear valued users:
To provide better service, Huobi DM (Huobi Futures) released partial liquidation at 18:00 on March 9, 2020 (GMT+8), helping users to reduce full liquidation risk.
In the partial liquidation mechanism, system will firstly reduce user’s positions in tier to the upper limit of the lower grade by liquidating positions partially and calculate its corresponding margin ratio. The partial liquidation will continue if the corresponding margin ratio still fails fulfilling requirement. Partial liquidation process will terminate automatically until the margin ratio to the corresponding net position tier is greater than 0%. When the margin ratio to the upper limit of the lowest grade Tier 1 still fails to be higher than 0%, the system will adopt full liquidation.
Here are the Tiered Adjustment Factors of futures contracts below:
( Maintenance Margin Rate = Adjustment Factor / Leverage )
Take BTC futures as an example. A user holds 15,000 BTC futures in net position with 20x leverage. According to BTC futures’ tiered adjustment factor policy above, the user belongs to Tier 3 with 28% of adjustment factor.
Liquidation will be triggered when the user’s margin ratio in Tier 3 goes equal to or smaller than 0%. Here are how the partial liquidation proceeding:
- Firstly, our system will degrade the user’s net position to the upper limit of Tier 2 which is 9999 in net position, and calculate the corresponding margin ratio. If the margin ration is larger than 0%, only 5001 contracts of BTC futures will be liquidated and 9999 contracts of BTC futures will be remained.
- If the users’ margin ration in the upper limit of Tier 2 is still equal to or below 0%, our system will continue descending the net position to the upper limit of Tier 1 and calculate its margin ratio. When the corresponding margin ratio is greater than 0%, 14001 contracts of BTC futures will be liquidated in total with 999 contracts of BTC futures remained.
- Full liquidation only occurs when the margin ratio in the upper limit of Tier 1 is still equal to or smaller than 0%.
Please note there will be no partial liquidation fee charged if your position is partially liquidated. Above adjustment factor would also be changed according to the latest market condition, please refer to the latest official announcement.
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