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How Does Liquidation Work in the Binance Portfolio Margin Account

2022-04-18 06:10
Liquidation occurs when an account’s Unified Maintenance Margin ratio (uniMMR) falls below 105%. In such cases, the liquidation system will take over the account and the user will not be able to perform any transactions during the liquidation process.
Once liquidation is triggered, such process will not stop until it is completed. Transferring assets into the Margin, USDⓈ-M Futures, or COIN-M Futures wallets after liquidation starts will not stop nor reverse the process.

Margin Account Liquidation

When the user’s margin position is liquidated, the margin liquidation engine will take over the assets on the account and sell them to cover the liabilities.

Futures Account Liquidation

Since there is no margin check at the order level, placing a large order may cause the uniMMR to drop below 105% when it gets executed, which increases the risk of sudden liquidation. Users must perform their own margin check prior to order placement and set an adequate risk control framework in order to mitigate liquidation risks.

To ensure service quality and market stability when the system is facing continuous liquidation, the Insurance Fund will directly take over the liquidation positions. Please note that the Insurance Fund will take over the liquidation positions at the bankruptcy prices, and the bankruptcy prices may be out of the contract’s market price range.
For positions exceeding the maximum amount of Insurance Fund coverage, Auto-Deleveraging (ADL) will be triggered.
It is worth noting that there is no liquidation fee on both Margin and Futures side.

Portfolio Margin Call Notifications

Binance will notify users by email and inmail notifications when their uniMMR falls below the following levels:
  • A first margin call will be sent to user when the uniMMR ≤ 200%
  • A second margin call will be sent to user when the uniMMR ≤ 150%
  • A user’s account will be automatically changed to reduce-only mode (opening new positions and margin loans suspended) when uniMMR ≤ 120%
  • A user will receive a liquidation call when uniMMR ≤ 105%

API Error Codes During Liquidation Account Status

When an account is in reduce-only or liquidation mode, the following order entry error codes will be in effect:
Account Status/UniMMR Range
Order Entry Response Error Code
uniMMR < 105%
UNABLE_TRADE_LOW_LIQUIDATION(HttpStatus.BAD_REQUEST, -3048, "Unable to trade. Your margin account is currently in liquidation. Please try again once the liquidation is processed.")
105% <= uniMMR < 120%
Futures Fapi/dapi error code: unchanged
When uniMMR falls below 120% : reduce- only error code