Liquidation

1. Minimizing Unnecessary Liquidation

MEXC uses fair price marking to avoid liquidation due to market manipulation or illiquidity.

2. Risk Limits: Higher margin levels for larger position sizes

This gives the liquidation system more usable margin to effectively close large positions that would otherwise be difficult to safely close. Larger positions are incrementally liquidated if possible.

If a liquidation is triggered, MEXC will cancel any open orders on the current contract in an attempt to free up margin and maintain the position. Orders on other contracts will still remain open.

MEXC employs a partial liquidation process involving automatic reduction of maintenance margin in an attempt to avoid a full liquidation of a trader’s position.

3. Traders on the Lowest Risk Limit Tiers

MEXC cancels their open orders in the contract.

If this does not satisfy the maintenance margin requirement then their position will be liquidated by the liquidation engine at the bankruptcy price.

4. Traders on Higher Risk Limit Tiers

The liquidation system attempts to bring a trader down to a lower Risk Limit, and thus lower margin requirements by:

1) Cancelling any open orders and then attempting to bring a trader down to a Risk Limit associated with their current position.

2) Submitting a FillOrKill order of the difference between the current Risk Limit position size and the position size to satisfy the margin requirement to avoid liquidation.

3) If the position still does not fulfill maintenance margin requirements then the entire position is taken over by the liquidation engine and a limit order to close the position is placed at the bankruptcy price.