The crypto market has become more and more popular in recent years. Many traders have made huge profits in crypto futures trading. However, volatility and leverage in the crypto market brings high returns but also comes with high risks. Liquidations caused by fluctuations are also common in leveraged trading.
What is Liquidation
In crypto futures trading with leverage, when the loss reaches a certain percentage and your funds are not enough to continue to hold your contract, the trading platform will forcibly close your positions to control the risk. This process is called liquidation.
For example: John opens a long position of 1 BTC with the leverage of 100x, his maintenance margin only needs 0.01 BTC. If trading is lost, liquidation will occur when the balance is below a certain percentage (set by the trading platform).
Liquidation in Most Exchanges: All Balance Was Being Taken Away
Taking 100x leveraged futures trading as an example, many exchanges like Binance, Bybit, Bitmex, Gate, Huobi, and Okex, forcibly close positions when the balance loss of ≥50%. The balance after liquidation will be deducted and used as the insurance funds of the trading platform. (The insurance fund is used to pay off all users’ deficits in this platform after liquidation.)
Is There An Exchange That Will Not Deduct the Balance After Liquidation?
The answer is yes. Bexplus does not deduct the users’ balance after liquidation and the insurance funds are provided by the platform itself. Bexplus forcibly closed the positions when the balance lost ≥70%, which gives users more opportunities for fault tolerance compared with Binance and other platforms. And the balance after the liquidation would not be deducted. Aiming to protect its users’ profit, all the insurance funds are paid by Bexplus. That means if the user’s balance loses to a negative value, the loss will be borne by Bexplus.
Since its inception in 2017, its more user-friendly insurance funding mechanism has been no problem and also makes more users feel the sincerity of Bexplus in a more practical and visual way.
For instance, in Binance, Bybit, Bitmex, Gate, Huobi, and Okex’s 100x leverage trading, your margin use is 1 BTC, when your loss reaches 0.5 BTC, you will be forced to close the position. And the remaining 0.5 BTC will be deducted and transferred as the platform’s insurance fund.
While trading on Bexplus, assuming your margin use is 1 BTC, when your loss reaches 0.7 BTC, you will be forced to close the position. Your balance 0.3 BTC after liquidation will not be deducted. Besides, if the user has a negative balance after liquidation, the loss will be borne by the Bexplus.
Know More about Bexplus
Since its inception, Bexplus has been user-centric and committed to building a user-centric cryptocurrency platform offering 100x leverage futures trading on various trading pairs: BTC, ETH, ADA, DOGE, XRP, etc. Bexplus is popular among over one million traders from over 200 countries/regions. In addition, it is safe for being accredited by MSB (Money Services Business). Furthermore, It also boasts of the following features:
- 100x leverage is offered to maximize trading profits.
- 100% bonus for every deposit.
- A Bitcoin wallet with an annualized interest rate of up to 21%.
- No KYC requirement, registration with Email verification within a few minutes.
- Demo account with 10 BTC for traders to get familiar with leverage trading.
- Intuitive and full-featured App on Apple App Store and Google Play.
- 7/24 hours one-to-one service to solve your problems at any time.
- Fast withdrawal without any time limit, and no deposit fee
- Copy Trading provided to allow superior traders to make profits for you
Click here to register an account in Bexplus now and enjoy the profitable crypto journey.
Source: https://crypto.news/the-balance-be-deducted-after-liquidation-something-you-must-know-in-cryptocurrency-futures-trading/