How does FTX handle liquidation in perpetual futures trading?

5 answers

• Erryl Crespo FelixJan 10, 2022 · 3 years ago
  When it comes to liquidation in perpetual futures trading, FTX has a unique approach. Unlike some other exchanges, FTX uses a sophisticated liquidation engine that aims to minimize the impact on traders. They have a tiered liquidation system that triggers liquidations at different levels of margin ratio. This helps prevent cascading liquidations and reduces the risk of market manipulation. Additionally, FTX offers a feature called 'Insurance Fund' which helps cover losses from liquidations, further protecting traders. Overall, FTX's liquidation system is designed to provide a fair and efficient trading environment.
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• Sotiris KonstantisJul 28, 2021 · 4 years ago
  FTX takes liquidation in perpetual futures trading seriously. They have implemented a robust risk management system to handle liquidations in a way that protects both traders and the exchange. FTX uses a mark price to determine liquidation prices, which helps prevent manipulation and ensures fair liquidations. They also have a socialized loss mechanism in place, which means that if a liquidation results in a loss, it is shared among profitable traders. This helps maintain the stability of the platform and prevents individual traders from being unfairly affected.
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• Umbayinah InahOct 22, 2022 · 3 years ago
  In perpetual futures trading, FTX has a well-designed liquidation process. When a trader's margin ratio falls below a certain threshold, FTX's liquidation engine automatically takes over and closes the trader's position. This helps prevent further losses and protects the trader's account balance. FTX also has a dedicated team that monitors the liquidation process to ensure its smooth operation. They constantly optimize their liquidation algorithms to minimize the impact on traders and maintain a fair trading environment. Overall, FTX's liquidation system is reliable and efficient.
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• Aroob ShahzadApr 08, 2021 · 4 years ago
  FTX, a leading cryptocurrency exchange, handles liquidation in perpetual futures trading with utmost care. They have implemented a comprehensive risk management system to protect traders from excessive losses. FTX's liquidation engine is designed to close positions when a trader's margin ratio reaches a certain threshold. This helps prevent the account from going into negative balance and ensures the integrity of the trading platform. FTX also provides a transparent liquidation process, allowing traders to monitor their positions and take necessary actions. Overall, FTX's approach to liquidation in perpetual futures trading is commendable.
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• Shiva KumaraJan 24, 2025 · 5 months ago
  In perpetual futures trading, FTX has a unique liquidation mechanism. When a trader's margin ratio falls below a certain level, FTX's liquidation engine automatically takes over and closes the position. This helps prevent the trader from incurring further losses and protects the overall stability of the platform. FTX's liquidation process is efficient and transparent, providing traders with peace of mind. It's worth noting that different exchanges may have different liquidation mechanisms, so it's important to understand each exchange's specific rules and procedures before engaging in perpetual futures trading.
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