FAQ

1. What is Forced Liquidation?

To maintain a position, investors must hold a certain proportion of the position’s value as margin, known as maintenance margin. When your position margin is insufficient to meet the maintenance margin requirement, the position will be forcibly liquidated.

CoinW uses the mark price method to avoid forced liquidations caused by lack of liquidity or market manipulation. This means your position will only be liquidated when the mark price falls below the liquidation price (for long positions) or rises above the liquidation price (for short positions).

2. Liquidation Price

The liquidation price is the trigger price at which a position will be forcibly liquidated.

• If the mark price of a contract falls below this price (for longs), or rises above this price (for shorts), the liquidation process will be triggered.

a. Calculation Formula (USDT-Margined Contracts, Isolated Margin Mode):

• Isolated Long Position:
  Estimated Liquidation Price = (Fixed Margin – Contract Size × Number of Contracts × Entry Price) ÷ [Contract Size × Number of Contracts × (Maintenance Margin Rate + Close Fee Rate – 1)]
  
   
• Isolated Short Position:
  Estimated Liquidation Price = (Fixed Margin + Contract Size × Number of Contracts × Entry Price) ÷ [Contract Size × Number of Contracts × (Maintenance Margin Rate + Close Fee Rate + 1)]
  
   

In isolated margin mode, Fixed Margin = Margin allocated to that isolated position.

b. Calculation Formula (USDT-Margined Contracts, Cross Margin Mode):
Estimated Liquidation Price = (Fixed Margin – Contract Size × Long Contracts × Long Entry Price + Contract Size × Short Contracts × Short Entry Price) ÷ (Contract Size × Short Contracts – Contract Size × Long Contracts + Contract Size × Net Contracts × Maintenance Margin Rate + Contract Size × Total Contracts × Close Fee Rate)

In cross margin mode, Fixed Margin = Contract account balance before liquidation occurs.

3. What is the Difference Between Entry Price and Latest Price?

To prevent unnecessary forced liquidations during sharp market swings, CoinW’s futures use Latest Price and Mark Price.

• Latest Price:
  The price of the most recent futures transaction.
  In other words, the final trade in the order book determines the latest price.
  It is used to calculate your realized PnL (profits and losses).
  
   
• Mark Price:
  A fair reference price designed to prevent price manipulation and unfair forced liquidations.
  It is not simply the latest transaction price you see on the market.
  Instead, it is calculated using a more stable and complex formula.
  Your liquidation price is determined by this Mark Price.