Futures position partial liquidation and PnL calculation optimization
Futures position partial liquidation and PnL calculation optimization
2024-03-08 03:44
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Bitget has optimized the partial liquidation mechanism and PnL calculation to provide users with a better trading experience and minimize the risk of partial liquidation.
Note: Make sure your app version is 2.26.0 or above. Otherwise, you may encounter issues, such as the inability to execute partial liquidation when your maintenance margin rate exceeds 100%, and errors in partial liquidation prices or PnL. Stay tuned for new versions and update your app as soon as possible.
1. Optimization of partial liquidation mechanism
Before and after optimization:
We use the maintenance margin rate (MMR) to gauge the risk level. MMR = maintenance margin required for the user's position ÷ account balance. Liquidation or partial liquidation will be triggered when the MMR reaches 100%.
Before optimization: Maintenance margin required for the user's position = value of the position × MMR of the position's corresponding tier. In this setup, the tiered MMR was based on the position value calculated with the m
ark price.
After optimization: Maintenance margin required for the user's position = value of the position × MMR of the position's corresponding tier. In this updated approach, the tiered MMR is based on the position value calculated with either the mark price OR the entry price, whichever is
smaller.
The position tiers can be found here:
https://www.bitget.com/futures/introduction/position-tier
Objective: This optimization aims to decrease the maintenance margin required for the user's position and implement a lower MMR. As a result, when the user's position value reaches Tier 2 and above, the likelihood of partial liquidation is minimized.
2. Optimization of PnL calculation
Before vs After:
Before: PnL = unrealized PnL ÷ position margin
Position margin = margin frozen at the time of placing the order + net margin transfer + net funding fee inflow
After: PnL = unrealized PnL ÷
initial margin
Initial margin = average entry price × position size ÷ leverage ÷ index price of the margin currency
Purpose: This optimization reduces disturbances caused by margin changes and provides users with a more accurate PnL value.
We apologize for any inconvenience this may cause. Thank you for supporting Bitget.
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