What happens when a margin call occurs on BitMEX?

6 answers

• Mar 18, 2022 · 3 years ago
  When a margin call occurs on BitMEX, it means that a trader's account balance has fallen below the required maintenance margin. This happens when the trader's leveraged positions experience significant losses. BitMEX will then liquidate a portion or all of the trader's positions to cover the losses and bring the account balance back above the maintenance margin. The liquidation process involves selling the trader's positions at the prevailing market price. It is important to note that the liquidation price may differ from the bankruptcy price, which is the price at which the trader's entire position would be liquidated.
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• Mar 18, 2022 · 3 years ago
  Margin calls can have a significant impact on traders. If a margin call is not met, the trader's positions will be liquidated, resulting in a loss of funds. This can be particularly devastating if the market moves against the trader's positions, as they may experience a larger loss than anticipated. Traders should always monitor their margin levels closely and have a plan in place to manage potential margin calls.
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• Mar 18, 2022 · 3 years ago
  When a margin call occurs on BitMEX, the trader's positions are liquidated to cover the losses. This process is automated and ensures that the trader's account balance remains above the maintenance margin. However, it is important to note that BitMEX's liquidation engine may not be able to close the positions at the exact liquidation price due to market volatility. Therefore, the actual liquidation price may differ slightly from the estimated liquidation price. It is also worth mentioning that BitMEX has a system called the 'Auto-Deleveraging' (ADL) system, which redistributes the losses from liquidations to profitable traders.
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• Mar 18, 2022 · 3 years ago
  Margin calls on BitMEX can be a stressful experience for traders. It is crucial to understand the risks involved in leveraged trading and to manage your positions accordingly. BitMEX provides tools such as stop orders and take profit orders to help traders limit their losses and protect their capital. It is recommended to use these risk management tools to mitigate the impact of margin calls.
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• Mar 18, 2022 · 3 years ago
  As an expert in the field, I can tell you that margin calls on BitMEX are an important aspect of trading on the platform. Traders need to be aware of their margin levels and take appropriate action to avoid margin calls. BitMEX's liquidation process is designed to protect the platform and its users from excessive losses. It is important to understand the mechanics of margin calls and to have a solid risk management strategy in place when trading on BitMEX or any other cryptocurrency exchange.
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• Mar 18, 2022 · 3 years ago
  Margin calls on BitMEX are just one example of the risks associated with leveraged trading. It is important for traders to understand the potential consequences of margin calls and to manage their positions accordingly. By closely monitoring margin levels and using risk management tools, traders can minimize the impact of margin calls and protect their capital.
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