How to Read Your Futures Positions and Liquidation Price

Hi Bittimers,

The futures trading mechanism on the Bittime platform is essentially the same as that of other futures exchanges. When trading futures, some seemingly complex parameters may leave you confused and uneasy. This article will teach you how to understand your position status and forced liquidation rules when trading futures on Bittime, making your trading clearer, safer, more proficient, and more efficient.

What key information should I pay attention to?

Let's take a look at your position first —

To make it easier for you to understand, let's set a unified initial account scenario:

Total account funds: 1,000 USDT

Position setup: Use 100 USDT as initial margin, open a 10x leverage long position on BTC (equivalent to establishing a BTC position worth 1,000 USDT).

Remaining available funds: 900 USDT

PnL (ROE)

This is the first parameter you should notice. It directly shows the current floating profit and loss of your position. The number above (PnL) indicates how much USDT you've profited by, while the percentage below (Return on Equity) reflects the current profit and loss ratio of the invested initial margin IM (see the next section). Its calculation formula: ROE = (PnL ÷ IM) × 100%

The denominator IM in the ROE calculation formula is the initial margin of that position, not the total funds in the account. This is the key to understanding the difference in ROE performance between Cross Margin and Isolated Margin modes.

First, let's introduce a concept — what are Cross Margin and Isolated Margin?

The difference between Cross Margin and Isolated Margin modes mainly lies in the rules of forced liquidation.

Cross Margin Mode: All positions in the futures account offset profits and losses against each other, sharing risk together

Under Cross Margin mode, the available funds of the entire futures account and the unrealized profits of all positions are collectively used as margin. Profits and losses from different positions can offset each other — money earned from one position can help absorb the risk of losing positions, resulting in higher capital efficiency. When it comes to forced liquidation, the platform monitors the total equity of the entire account in real time. Liquidation is only triggered when the account's total equity drops to the MM level.

Risk point: Under extreme market conditions, huge losses from a single position may consume all funds in the account, affecting all positions.

Isolated Margin Mode: Positions are settled independently, losses are limited to the allocated margin

Under Isolated Margin mode, each position has its own separate margin, which does not affect other funds or other positions in the account. Forced liquidation is only triggered when the remaining funds of an isolated position drop to the MM level. The maximum loss is the margin invested in that position, and it will not affect other money or other positions in the account.

Risk point: A single position has weaker resistance to volatility, and is more likely to trigger liquidation of individual positions when market fluctuations are large.

IM and MM

In futures trading, there are two other very critical margin concepts directly related to your eligibility to open positions and position safety: IM (Initial Margin) and MM (Maintenance Margin).

Simply put: IM determines whether you can open a position, while MM determines whether you will get liquidated.

IM — Your ticket to opening a position

IM is the initial margin you must invest according to the leverage ratio when establishing a futures position. You can only successfully open that position if the available funds in your account are no less than the required IM.

As in the example above: You use 10x leverage to open a BTC long position worth 1,000 USDT, and the 100 USDT of initial principal deducted by the system is the IM of this position.

MM — The lifeline of your position

MM is the minimum margin threshold that must be maintained in your position (Isolated Margin) / account (Cross Margin) to prevent the current position from being forcibly liquidated by the system. It is the safety red line used by the platform for risk control. When the market moves in an unfavorable direction and losses continue to grow, once your remaining funds drop to the MM level, the system will automatically intervene and trigger the forced liquidation mechanism.

Back to how to read your ROE — note that ROE under Cross Margin and Isolated Margin is slightly different.

Cross Margin Mode

- Positive (green)

BTC rises, and the unrealized PnL of this position is +150 USDT.

ROE = (+150 ÷ 100) × 100% = +150%

Initial margin of this position: 100 USDT Account available balance: Increases from 900 USDT to 1,050 USDT (900 + 150)

Total account equity: 1,150 USDT

Congratulations, your position is in pure profit. You can continue holding, or you can close the position at any time to lock in profits and pocket some easy profits. At the same time, this also means your available margin has increased, and other positions can handle higher-risk markets.

- Negative (red)

BTC falls, and the unrealized PnL of this position is -300 USDT.

ROE = (-300 ÷ 100) × 100% = -300%

Initial margin of this position: 100 USDT Account available balance: Decreases from 900 USDT to 600 USDT (900 - 300)

Total account equity: 700 USDT

Why hasn't liquidation happened even when ROE reaches -300%? This is the benefit of Cross Margin: the denominator of ROE is only the 100 USDT invested in opening that single position. When the loss reaches 300 USDT, the system will automatically use the 900 USDT of unused available balance in the account to cover the loss. As long as the account's total equity is higher than MM, liquidation will not occur. Only when the market continues to deteriorate and the account's total equity drops to equal the MM level will Cross Margin liquidation be triggered, at which point the entire account's funds will be wiped out at once.

Isolated Margin Mode

- Positive (green)

BTC rises, and the unrealized PnL of this position is +150 USDT.

ROE = (+150 ÷ 100) × 100% = +150%

Total assets within this position: 250 USDT (100 initial margin + 150 floating profit)

Account available balance: Remains at 900 USDT unchanged

Total account equity: 1,150 USDT

Under Isolated Margin mode, floating profits are locked inside the independent position and will not automatically increase the account's available balance. If you want to use this profit, you need to manually close the position.

- Negative (red)

BTC falls, and the unrealized PnL of this position is -80 USDT.

 ROE = (-80 ÷ 100) × 100% = -80%

Remaining assets of this position: 20 USDT (100 - 80)

Account available balance: Remains at 900 USDT unchanged (completely unaffected)

Total account equity: 920 USDT

When losses continue to expand and the remaining assets of this position (IM + unrealized PnL) drop to the MM level, the residual funds in the position can no longer meet the minimum margin requirement, and the system will trigger single-position forced liquidation. After liquidation, you lose the initial margin invested in that position, but the 900 USDT of available balance in your account that was not involved in trading remains completely intact, achieving risk isolation.

Entry Price & Mark Price

These two values represent your opening cost price and the real-time market price. Among them, Mark Price is a comprehensive reference price calculated by Bittime based on multiple parameters. It best reflects the market price, filters out the impact of price spikes and large orders, and maximizes the safety of your position.

Estimated Liq. Price

This value is the safety red line of your position. It provides a reference: if the real-time Mark Price breaks above or below this price line in the opposite direction, the forced liquidation mechanism will be triggered.

What is "Forced Liquidation"?

Forced liquidation refers to the mechanism where, when the market price fluctuates significantly in a direction unfavorable to your position, causing your account margin balance to be insufficient to maintain the current position, the trading platform will automatically sell your position at the market price. Simply put, when your losses continue to expand, causing the remaining margin to fall below the bottom line specified by the system (i.e., the maintenance margin requirement), the system will automatically intervene and forcibly close your trade to prevent you from incurring debts exceeding your account principal.

Why does the Estimated Liq. Price change?

During trading, many users find that even though they haven't made any buy or sell operations, the estimated liquidation price has quietly changed. In fact, the estimated liquidation price is dynamically calculated by the system based on the real-time available margin in your account.

The following common situations can cause the estimated liquidation price to change:

1. Funding rate settlement: Perpetual futures settle the funding rate at fixed intervals (such as every 8 hours). If you are the payer, the funding fee will be deducted from your margin, causing the margin to decrease and the liquidation price to move closer to the current price. If you are the receiver, the margin increases and the liquidation price moves further away.
2. Profits and losses of other positions under Cross Margin mode: If you are using Cross Margin mode, all futures positions in the account share the same margin pool. When other positions you hold incur losses, the total capital pool shrinks, and the liquidation price of the current position will change accordingly.
3. Manual margin adjustment: Under Isolated Margin mode, if you manually add margin to this position, the liquidation price will move in a safer direction. Conversely, if you reduce margin, the liquidation price will be easier to trigger.
4. Changes in position size: If you add to your position or partially close it while holding, the system's average entry price and required maintenance margin will both be recalculated, and the estimated liquidation price will naturally be updated accordingly.
5. Deduction of trading fees: Any opening, closing, or partial closing operation incurs fees. If your available funds are low, the deduction of fees will reduce your available margin, which will also slightly adjust the estimated liquidation price.

The fluctuation of profit and loss figures is just the normal breathing of the market. Generally speaking, under the leverage provided by Bittime, if you choose reasonable trading pairs and practice good capital management, it is very difficult for your positions to reach the forced liquidation line. To prevent loss of your funds, please reserve sufficient margin for your futures account, allocate your Cross Margin and Isolated Margin trading strategies properly, and incorporate stop-loss mechanisms — set your maximum allowable loss in advance each time you open a position, and automatically close the position before reaching liquidation, keeping the initiative and risk control bottom line of your trading in your own hands.