Online
35278 days on xHamster
87693M profile views
81610K subscribers
44148 comments left

Liquidating positions

Proper risk management in this context separates the plebs from the consistently successful traders.First, a little background for the less experienced traders.From the exchange’s point of view, they want to make sure that you are able to keep paying the profits of the person on the other side of your trade.

On Bit MEX at 100x you would put down 1% of the position size, or

On Bit MEX at 100x you would put down 1% of the position size, or $1,000 (around 1 BTC at current prices).

This is a little more than 1%, because it also has to cover the exit fee on the position as well as potential funding.

When you’re long your liquidation price is $1,044.78 — this is a little more than $5 below your entry price: So once the mark price on Bit MEX reaches $1044.78 you lose the 1.1 BTC in margin, you’re liquidated, “rekt” as the kids say. However, if you were to sell out of the position at $1,045, just above the liquidation, your Profit/Loss on that is -0.456 BTC: By getting out right before liquidation, your 1.1 lost -0.456 BTC, and you still have 0.65 BTC left to play with.

The value of getting out of your position before liquidation hits in this case is saving 1 BTC.

So this is not trivial, you get to save 20% of your equity on the trade rather than paying the insurance fund/other traders!

||

On Bit MEX at 100x you would put down 1% of the position size, or $1,000 (around 1 BTC at current prices).This is a little more than 1%, because it also has to cover the exit fee on the position as well as potential funding.When you’re long your liquidation price is $1,044.78 — this is a little more than $5 below your entry price: So once the mark price on Bit MEX reaches $1044.78 you lose the 1.1 BTC in margin, you’re liquidated, “rekt” as the kids say. However, if you were to sell out of the position at $1,045, just above the liquidation, your Profit/Loss on that is -0.456 BTC: By getting out right before liquidation, your 1.1 lost -0.456 BTC, and you still have 0.65 BTC left to play with.The value of getting out of your position before liquidation hits in this case is saving 1 BTC.So this is not trivial, you get to save 20% of your equity on the trade rather than paying the insurance fund/other traders!

,000 (around 1 BTC at current prices).

This is a little more than 1%, because it also has to cover the exit fee on the position as well as potential funding.

When you’re long your liquidation price is

On Bit MEX at 100x you would put down 1% of the position size, or $1,000 (around 1 BTC at current prices).

This is a little more than 1%, because it also has to cover the exit fee on the position as well as potential funding.

When you’re long your liquidation price is $1,044.78 — this is a little more than $5 below your entry price: So once the mark price on Bit MEX reaches $1044.78 you lose the 1.1 BTC in margin, you’re liquidated, “rekt” as the kids say. However, if you were to sell out of the position at $1,045, just above the liquidation, your Profit/Loss on that is -0.456 BTC: By getting out right before liquidation, your 1.1 lost -0.456 BTC, and you still have 0.65 BTC left to play with.

The value of getting out of your position before liquidation hits in this case is saving 1 BTC.

So this is not trivial, you get to save 20% of your equity on the trade rather than paying the insurance fund/other traders!

||

On Bit MEX at 100x you would put down 1% of the position size, or $1,000 (around 1 BTC at current prices).This is a little more than 1%, because it also has to cover the exit fee on the position as well as potential funding.When you’re long your liquidation price is $1,044.78 — this is a little more than $5 below your entry price: So once the mark price on Bit MEX reaches $1044.78 you lose the 1.1 BTC in margin, you’re liquidated, “rekt” as the kids say. However, if you were to sell out of the position at $1,045, just above the liquidation, your Profit/Loss on that is -0.456 BTC: By getting out right before liquidation, your 1.1 lost -0.456 BTC, and you still have 0.65 BTC left to play with.The value of getting out of your position before liquidation hits in this case is saving 1 BTC.So this is not trivial, you get to save 20% of your equity on the trade rather than paying the insurance fund/other traders!

,044.78 — this is a little more than below your entry price: So once the mark price on Bit MEX reaches 44.78 you lose the 1.1 BTC in margin, you’re liquidated, “rekt” as the kids say. However, if you were to sell out of the position at

On Bit MEX at 100x you would put down 1% of the position size, or $1,000 (around 1 BTC at current prices).

This is a little more than 1%, because it also has to cover the exit fee on the position as well as potential funding.

When you’re long your liquidation price is $1,044.78 — this is a little more than $5 below your entry price: So once the mark price on Bit MEX reaches $1044.78 you lose the 1.1 BTC in margin, you’re liquidated, “rekt” as the kids say. However, if you were to sell out of the position at $1,045, just above the liquidation, your Profit/Loss on that is -0.456 BTC: By getting out right before liquidation, your 1.1 lost -0.456 BTC, and you still have 0.65 BTC left to play with.

The value of getting out of your position before liquidation hits in this case is saving 1 BTC.

So this is not trivial, you get to save 20% of your equity on the trade rather than paying the insurance fund/other traders!

||

On Bit MEX at 100x you would put down 1% of the position size, or $1,000 (around 1 BTC at current prices).This is a little more than 1%, because it also has to cover the exit fee on the position as well as potential funding.When you’re long your liquidation price is $1,044.78 — this is a little more than $5 below your entry price: So once the mark price on Bit MEX reaches $1044.78 you lose the 1.1 BTC in margin, you’re liquidated, “rekt” as the kids say. However, if you were to sell out of the position at $1,045, just above the liquidation, your Profit/Loss on that is -0.456 BTC: By getting out right before liquidation, your 1.1 lost -0.456 BTC, and you still have 0.65 BTC left to play with.The value of getting out of your position before liquidation hits in this case is saving 1 BTC.So this is not trivial, you get to save 20% of your equity on the trade rather than paying the insurance fund/other traders!

,045, just above the liquidation, your Profit/Loss on that is -0.456 BTC: By getting out right before liquidation, your 1.1 lost -0.456 BTC, and you still have 0.65 BTC left to play with.

The value of getting out of your position before liquidation hits in this case is saving 1 BTC.

So this is not trivial, you get to save 20% of your equity on the trade rather than paying the insurance fund/other traders!

Now the way the futures risk management systems work is they require this initial margin at open, but they also require that you hold a minimum amount of equity (the market value of your position vs the initial margin you put down) to keep the position “alive”.

Please or register to post comments
If spammers comment on your content, only you can see and manage such comments Delete all

Liquidating positions introduction

Liquidating positions