Bybit now supports the Isolated Margin mode on the Unified Trading Account, alongside the existing Cross Margin and Portfolio Margin modes. The Isolated Margin mode depicts the margin placed into a position isolated from the trader's account balance. This mode allows traders to manage their risks accordingly as the maximum amount a trader would lose from liquidation is limited to the position margin placed for that open position.
When the Mark Price reaches the liquidation price, the position will be settled at the bankruptcy price, corresponding to the 0% margin price level. Additionally, this occurrence signifies that the position margin balance has fallen below the necessary maintenance margin level. For more information on how to check the mark price, please refer here.
Below is the liquidation price calculation for the USDT Perpetual and Expiry, USDC Perpetual, and Inverse Perpetual and Expiry Contracts under the Isolated Margin mode on Unified Trading Account.
Inverse Perpetual and Expiry Contracts
Formulas
For Buy/Long:
Liquidation Price (Long) = [Position Size × (MM Rate + 1)] ÷ [(Position Size ÷ Entry Price) + (Position Size ÷ Entry Price ÷ Leverage) + (Extra Margin Added ÷ ( 1 + Taker Fee Rate)) + MM Deduction]
For Sell/Short:
Liquidation Price (Short) = [Position Size × (1 − MM Rate)] ÷ [(Position Size ÷ Entry Price) − (Position Size ÷ Entry Price ÷ Leverage) − (Extra Margin Added ÷ ( 1 − Taker Fee Rate)) − MM Deduction]
whereas,
Position Value = Contract Quantity ÷ Mark Price
Initial Margin = (Position Value / Leverage) + Estimated Fee to Close Position
Maintenance Margin = (Position Value x MMR) − Maintenance Margin Deduction + Estimated Fee to Close Position
Estimated Fee to Close Position = Position Size / Position Average Entry Price × (1 ± 1 / Leverage) × Taker Fee Rate
Notes:
— The Maintenance Margin Rate (MMR) is based on the risk limit tier. For more details please refer to Maintenance Margin (Inverse Perpetual and Expiry Contracts).
— Minor differences from the actual liquidation price may arise due to the fees to close the position(s).
Example
Trader B has placed a BTCUSD short position of 30,000 USD at a price of 60,000 USD with 10x leverage. Assuming the taker fee rate is 0.0550% and the Maintenance Margin Rate (MMR) is 0.5% with no extra margin added:
Position Value = 30,000 / 60,000 = 0.5 BTC
Fee to Close = 30,000 / 60,000 × (1 − 1 / 10) × 0.055% = 0.0002475 BTC
Initial Margin = (0.5 / 10) + 0.0002475 = 0.0502475 BTC
Maintenance Margin = (0.5 x 0.5%) − 0 + 0.0002475 = 0.0027475 BTC
Liquidation Price (LP) = [30,000 × (1 − 0.5%)] ÷ [(30,000 ÷ 60,000) − (30,000 ÷ 60,000 ÷ 10) − (0 ÷ ( 1 − 0.055%)) − 0] = 66,333.33 USD
USDT Perpetual and Expiry Contracts
Formulas
For Buy/Long:
Liquidation Price (Long) = [(Entry Price × Position Size) − (Entry Price × Position Size ÷ Leverage) − (Extra Margin Added ÷ ( 1 − Taker Fee Rate)) − MM Deduction] ÷ [Position Size − (Position Size × MM Rate)]
For Sell/Short:
Liquidation Price (Short) = [(Entry Price × Position Size) + (Entry Price × Position Size ÷ Leverage) + (Extra Margin Added ÷ ( 1 + Taker Fee Rate)) + MM Deduction] ÷ [Position Size + (Position Size × MM Rate)]
whereas,
Position Value = Contract Quantity x Mark Price
Initial Margin = (Position Value / Leverage) + Estimated Fee to Close Position
Maintenance Margin = (Position Value x MMR) − Maintenance Margin Deduction + Estimated Fee to Close Position
Estimated Fee to Close Position = Position Size x Position Average Entry Price × (1 ± 1 / Leverage) × Taker Fee Rate
Notes:
— The Maintenance Margin Rate (MMR) is based on the risk limit tier. For more details please refer to Maintenance Margin (USDT Perpetual and Expiry Contracts).
— Minor differences from the actual liquidation price may arise due to the fees to close the position(s).
Example
Trader A initially placed a long entry of 1 BTC at 40,000 USDT with 50x leverage. Subsequently, he manually added 3,000 USDT more to his position margin. Assuming the maintenance margin rate is 0.5% and the taker fee rate is 0.0550%. The new Liquidation Price after the margin is added will be calculated as follows:
Position Value = 1 x 40,000 = 40,000 USDT
Fee to Close = 1 x 40,000 × (1 − 1 / 50) × 0.055% = 21.56
Initial Margin = (40,000 / 50) + 21.56 = 821.56 USDT
Maintenance Margin = (40,000 x 0.5%) − 0 + 21.56 = 221.56
Liquidation Price = [(40,000 × 1) − (40,000 × 1 ÷ 50) − (3,000 ÷ ( 1 − 0.0550%)) − 0] ÷ [1 − (1 × 0.5%)] = 36,380.25 USDT
USDC Perpetual Contracts
Formulas
For Buy/Long:
Liquidation Price (Long) = [(Position Entry Price × Position Size) − (Position Entry Price × Position Size ÷ Leverage) − (Extra Margin Added ÷ ( 1 − Taker Fee Rate)) − MM Deduction] ÷ [Position Size − (Position Size × MM Rate)]
For Sell/Short:
Liquidation Price (Short) = [(Position Entry Price × Position Size) + (Position Entry Price × Position Size ÷ Leverage) + (Extra Margin Added ÷ ( 1 + Taker Fee Rate)) + MM Deduction] ÷ [Position Size + (Position Size × MM Rate)]
whereas,
Position Value = Contract Quantity x Mark Price
Initial Margin = (Position Value / Leverage) + Estimated Fee to Close Position
Maintenance Margin = (Position Value x MMR) − Maintenance Margin Deduction + Estimated Fee to Close Position
Estimated Fee to Close Position = Position Size x Position Average Entry Price × (1 ± 1 / Leverage) × Taker Fee Rate
Notes:
— The Maintenance Margin Rate (MMR) is based on the risk limit tier. For more details please refer to Maintenance Margin (USDC Perpetual Contracts).
— Minor differences from the actual liquidation price may arise due to the fees to close the position(s).
The liquidation price calculation for USDC Perpetual contracts under the Unified Trading Account isolated margin mode is similar to that of USDT Perpetual. However, please note that there is a Session Settlement Mechanism for USDC Perpetual contracts in which the average entry price will be updated to the Mark Price at the time of settlement.
Following a session settlement, the average entry price will be updated. This new price will be used to recalculate both the fee to close and the maintenance margin. However, under USDC Perpetual isolated margin mode, the initial margin displayed in the position tab will remain unchanged. Any difference between the old and new fee to close, as well as any session realized profit & loss (P&L), will be added to the initial margin.
Example
Trader B has opened a 1 BTCUSDC short position with an entry price of 10,000 USDC and 10x leverage. Assuming the maintenance margin rate is 0.4% and the taker fee rate is 0.0550%. The liquidation price is calculated as follows:
Position Value = 1 x 10,000 = 10,000 USDC
Fee to Close = Position Value x (1 + 1/ Leverage) x Taker Fee Rate
= (1 x 10,000) x (1 + 1 / 10) x 0.0550% = 6.05 USDC
Initial Margin = Position Value x (1 / Leverage) + Fee to Close
= (1 x 10,000) x (1/10) + 6.05 = 1006.05 USDC
Maintenance Margin = 10,000 x 0.4% + 6.05 = 46.05 USDC
Liquidation Price = [(10,000 × 1) + (10,000 × 1 ÷ 10) + (0 ÷ ( 1 + 0.0550%)) + 0] ÷ [1 + (1 × 0.4%)] = 10,956.1753 USDC
At 4PM UTC settlement time, the mark price at settlement time is 9,900 USDC and the realized P&L for the current settlement cycle is 100 USDC [(10,000 USDC − 9,900 USDC) x 1].
During this time, the new average entry price will be updated to 9,900 USDC and used to calculate the new fee to close and maintenance margin. However, the initial margin needed is still calculated using the initial position entry price of 10,000 USDC.
The liquidation price as of 4PM UTC is calculated as follows:
Fee to Close = New Position Value x (1 + 1 / Leverage) x Taker Fee Rate
= (1 x 9,900) x (1 + 1 / 10) x 0.0550% = 5.9895 USDC
Initial Margin = Initial Position Value x (1 / Leverage) + New Fee to Close
= 10,000 x (1 / 10) + 5.9895 = 1,005.9895 USDC
Maintenance Margin = 9,900 x 0.4% + 5.9895 = 45.5895 USDC
Liquidation Price = [(9,900 × 1) + (9,900 × 1 ÷ 10) + (100 ÷ ( 1 + 0.055%)) + 0] ÷ [1 + (1 × 0.4%)] = 10,946.16 USDC
To learn more about the liquidation process under each position mode in Unified Trading, please refer to Trading Rules: Liquidation Process (Unified Trading Account).