The loss on a position exceeds its margin. Who bears the excess loss?
This is how I understand it: A large portion of Binance’s insurance fund comes from liquidation fees and profits from closing bankrupt positions. It accumulates during stable market conditions and is used to cover losses when positions are liquidated at a loss during extreme volatility.
When ADL is triggered, the system ranks profitable positions in the opposite direction and closes part of them at the bankruptcy price of the liquidated position.
My current practice: Closing a position manually usually results in a smaller loss than waiting to be liquidated. When you’re liquidated, an additional liquidation fee is generally charged.
Related coin: $BTC Current price: 75454.01 (24h -0.37%).
#BTC
This is how I understand it: A large portion of Binance’s insurance fund comes from liquidation fees and profits from closing bankrupt positions. It accumulates during stable market conditions and is used to cover losses when positions are liquidated at a loss during extreme volatility.
When ADL is triggered, the system ranks profitable positions in the opposite direction and closes part of them at the bankruptcy price of the liquidated position.
My current practice: Closing a position manually usually results in a smaller loss than waiting to be liquidated. When you’re liquidated, an additional liquidation fee is generally charged.
Related coin: $BTC Current price: 75454.01 (24h -0.37%).
#BTC
