Let’s talk about the insurance fund and ADL.
The bankruptcy price is the price at which a position’s losses exactly equal its entire margin. Liquidation usually occurs before the price reaches the bankruptcy price.
One point worth considering: Binance’s insurance fund mainly comes from liquidation fees collected and profits from closing bankrupt positions. It builds up during normal market conditions and is used to cover losses when extreme volatility causes a position’s losses to exceed its margin.
Closing a position yourself often results in a smaller loss than waiting to be liquidated: liquidation usually incurs an additional liquidation fee.
Back to the market: $BTC is currently at 83462.01 (+2.26% over 24h).
The bankruptcy price is the price at which a position’s losses exactly equal its entire margin. Liquidation usually occurs before the price reaches the bankruptcy price.
One point worth considering: Binance’s insurance fund mainly comes from liquidation fees collected and profits from closing bankrupt positions. It builds up during normal market conditions and is used to cover losses when extreme volatility causes a position’s losses to exceed its margin.
Closing a position yourself often results in a smaller loss than waiting to be liquidated: liquidation usually incurs an additional liquidation fee.
Back to the market: $BTC is currently at 83462.01 (+2.26% over 24h).