The bankruptcy price refers to the price at which the initial margin of all positions is lost.

In the event of a forced liquidation, the forced liquidation of the position is executed at the bankruptcy price, which means that you will lose all the initial margin. If the final liquidated price is better than the bankruptcy price, the excess margin will go to the insurance fund. Conversely, if the final liquidated price is worse than the bankruptcy price, the insurance fund will be used to fill the difference.

Bankruptcy price (margin by warehouse model)

Long positions:

Bankruptcy price = opening price × (1-initial margin rate*)

Short position:

Bankruptcy price = opening price × (1 + initial margin rate*)

*Initial Margin Rate = 1/ Leverage

For example:

The trader holds a long position of 1 BTC, the entry price is 10,000 USDT, and the leverage is 50 times

Bankruptcy price = 10,000 × (1-2%) = 9,800 USDT

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