> ## Documentation Index
> Fetch the complete documentation index at: https://docs.liquid.trade/llms.txt
> Use this file to discover all available pages before exploring further.

# Liquidations

> What triggers a liquidation on Liquid, what happens to your position, and how to avoid it.

A position is liquidated when your collateral falls below the [maintenance margin](https://docs.liquid.trade/trading/leverage.md#maintenance-margin): the minimum needed to keep it open. That's 1.25% of the position for a 40x market, up to 16.7% for a 3x market.

<video src="https://mintcdn.com/liquidmax/-qm65dq9XVZZbbEs/videos/trading/liquidations.mp4?fit=max&auto=format&n=-qm65dq9XVZZbbEs&q=85&s=6c73da56308ee909bf9a80ce5bd9b9fa" autoPlay loop muted playsInline aria-label="Your equity is a bar with a dashed maintenance-margin line near its left end. As the mark price moves against the position the bar drains until it touches the line, and the position is liquidated." />

What triggers a liquidation

## Your liquidation price

The order form shows an estimated **Liquidation Price** before you place a trade, and your open position shows its liquidation price. It can move after you open the position:

* **Funding** payments change your margin. See [Funding rates](https://docs.liquid.trade/trading/funding-rates.md).
* **Cross margin:** gains and losses on your other cross positions move it.
* **Isolated margin:** adding or removing margin moves it.

For cross positions, the multiplier you picked doesn't change the liquidation price; it only changes how much collateral the position uses. For isolated positions, a higher multiplier means less margin and a closer liquidation price.

Liquidations use the **mark price**, not the last trade. The mark price blends prices from major exchanges with our own order book, so a single spike or thin book doesn't liquidate you. In fast markets, it can differ from the price you see on the book.

## What happens during a liquidation

**1. Market liquidation**

Your position is closed with market orders on the order book. If it closes before your margin runs out, you keep whatever collateral is left. Positions larger than \$100,000 are closed 20% at a time.

**2. Backstop liquidation**

If your collateral falls below two-thirds of the maintenance margin before the order book can close the position, it's taken over by a backstop liquidator. In a backstop liquidation, you lose the remaining maintenance margin.

What you can lose depends on the margin mode:

* **Cross:** a backstop liquidation takes all your cross positions and cross margin. If you have no isolated positions, your trading balance goes to zero.
* **Isolated:** only that position and its margin are affected. Your other positions and balance are untouched.

## Avoid liquidation

> [!TIP]
>
> * Use a lower [multiplier](https://docs.liquid.trade/trading/leverage.md).
> * Set a [stop loss](https://docs.liquid.trade/trading/take-profit-stop-loss.md) above your liquidation price, so you exit on your terms.
> * Use [isolated margin](https://docs.liquid.trade/trading/leverage.md#cross-and-isolated-margin) to cap what one trade can lose.
> * Add margin or reduce the position when the price moves against you. See [Manage and close positions](https://docs.liquid.trade/trading/managing-positions.md).


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