Cross-margin and isolated-margin positions operate independently—their risks do not affect each other. In this article, each independently existing unit that undergoes separate risk control and liquidation is referred to as a "risk unit."

Gate uses Initial Margin Ratio (IMR) and Maintenance Margin Ratio (MMR) to evaluate the risk level of the Unified Account. Our system will perform the following risk control measures based on the relevant thresholds.

For Cross-Margin Positions

1. Auto-Cancel

When the IMR is below 100%, the system will auto-cancel open orders to ensure more margin is available in the account.

The auto-cancellation will start by canceling options open orders, spot open orders, and then futures open orders. When canceling options open orders, orders that are not to reduce positions will be canceled first, followed by the bid orders to reduce positions; when canceling spot open orders, the cancellation will be conducted in a descending order based on haircut losses—the ones with greater haircut losses will be canceled first; when canceling futures open orders, those to open positions will be canceled first, and then those to add positions. The system will stop canceling once the IMR is no lower than 100%.

When the IMR is below 100%, the leverage cannot be increased, the account available margin is 0, users cannot open new positions or increase positions, but they can close positions.

2. Forced Repayment

When the MMR is no greater than 110%, the system will auto-repay the liabilities with assets in the account to ensure more margin is available. Only the available balance of the corresponding coins of liabilities will be used for repayment. Other coins in your account will not be sold for repayment.

Example: Account Status:

Due to market volatility, the MMR falls below 110%, triggering forced repayment: 1 BTC will be used to repay the 1.5 BTC liability. As there's no available ETH in the account, the ETH liability will not be repaid. After the forced repayment, the account status is as follows:

3. Liquidation

When the MMR is no greater than 100%, liquidation will be triggered to lower the risk level of the account. The liquidation will start by cancelling all open orders and will not stop until the MMR is above 100%.

If the MMR is still no greater than 100% after all open orders are canceled, the system will first liquidate futures positions and options short positions simultaneously and then handle borrowings.

For USDT Perp positions, the system will first liquidate hedging positions and then one-way positions; for hedging positions, those with greater hedging position value will be liquidated first; for one-way positions, those with better liquidity will be liquidated first.

The system will reduce positions in batches, with the specific amount closed each time dynamically adjusted based on market conditions and position status, in order to minimize market impact and mitigate the risk of forced liquidation.

When liquidating one-way positions, the system uses the bankruptcy price calculated based on the maintenance margin lost after liquidation (see below for the calculation formula) as the liquidation price. After determining the liquidation price and amount, the system will place an order in the secondary market and conduct a settlement at the bankruptcy price after the order is filled (Note: the settlement price here is not the fill price); if the order cannot be fully filled due to a lack of liquidity in the secondary market, the remaining portion will be taken over at the liquidation price. After the takeover, a settlement at the liquidation price will also be conducted. During the liquidation process, the trading fee will be calculated at a rate of 0.075%. After the first liquidation, the system will first lower the risk limit tier of this market (as long as it can be lowered) to reduce the maintenance margin requirement of the remaining positions. Next, it will check the MMR. Liquidation will stop once the MMR is above 100%.

When liquidating hedging positions, the long and short positions will be liquidated and hedged at the current mark price to reduce positions (with long and short positions being each other's counterparty). After the liquidation ends, the system will first lower the risk limit tier of this market (as long as it can be lowered) to reduce the maintenance margin requirement of the remaining positions. Next, it will check the MMR. Liquidation will stop once the MMR is above 100%. If only one-way positions exist after liquidating hedging positions, they will be liquidated as one-way positions.

Bankruptcy Price Calculation Rules:

For users holding futures isolated-margin positions: Cross Position Bankruptcy Price = Mark Price × (1 ± Account MMR).

For users without futures isolated-margin positions: Long Position Bankruptcy Price = Mark Price × [1 - (MMR + Liquidation Fee Rate) × Account MMR] / (1 - Liquidation Fee Rate) Short Position Bankruptcy Price = Mark Price × [1 + (MMR + Liquidation Fee Rate) × Account MMR] / (1 + Liquidation Fee Rate)

For options short positions, the system will start by liquidating the positions of coins with better liquidity. For multiple options positions of the same coin, the positions that can lower the overall delta when liquidated and have better liquidity will be liquidated first. The system will prioritize placing orders in the secondary market. If the liquidity of the secondary market is too low to liquidate positions, the remaining positions to be liquidated will be taken over at the agreed price. The system will not stop the liquidation process until the MMR is above 100%.

For liabilities (including actual loans and negative balances), the system will start by repaying liabilities of coins with a larger liability amount. In selling assets, the system will sell coins with larger USD values. After selling all spot assets (note that spot assets here exclude the amount occupied by futures isolated positions, and selling them will not affect the asset security of futures isolated positions), options long positions will be liquidated for repayment. After selling assets, the system will charge 2% of the liabilities and add them to the insurance fund to cover unexpected losses. Liquidation will stop once the MMR is above 100% during the process of selling assets for repayment

In conclusion, liquidation in Unified Account is partial liquidation, which means that after liquidation is triggered, only part of the positions will be affected in most cases. The liquidation performed will not liquidate your positions all at once. Instead, it goes partially. Liquidation will stop once the MMR is back to the required safety threshold, and your account will go back to the normal state. Users can continue to hold the remaining positions. Nevertheless, in the case of extreme market conditions, when the price moves against users' expectations quickly, it is possible that all positions will be liquidated by the system, and there might even be bankruptcy.

In the case of bankruptcy, when there are negative balances for some coins after liquidating all derivatives positions, selling all assets, and repaying all liabilities, our platform will use insurance funds to cover the loss, or in other words, the negative balance, to bring your account back to the normal state. If the loss is too big, a manual review process will be initiated. If your account's negative balance is not covered after bankruptcy, please wait patiently or contact customer support.

Conclusion

For Futures Isolated-Margin Positions

The risk control rules for the risk unit of futures isolated positions are the same as those of the classic futures account and those in the Single-Currency Margin Mode. Please refer to: Single-Currency Margin Mode-Margin Requirements and Risk Control Rules

Gate reserves the final right to interpret the product.