IMBX Futures Liquidation Protocols

1. Overview

This document explains the liquidation protocol for futures trading on IMBX.

Liquidation is an automated risk management process designed to prevent excessive losses in leveraged trading.

Important:

• Liquidation prices shown in the interface are indicative only. The actual execution price at the time of liquidation may differ due to slippage, liquidity, and market conditions.
• It is the responsibility of each user to manage risk appropriately and avoid reaching liquidation levels.
• IMBX does not guarantee prevention of losses from liquidation events.

2. Key Terminology

• Margin Balance: Collateral in your futures account, adjusted by unrealized PnL.

• Maintenance Margin (MM): Minimum margin required to keep positions open. Falling below this threshold may trigger liquidation.

• Indicative Liquidation Price: The price displayed in the interface as the expected liquidation level. Actual results may vary.

• Margin Rate (MR) / Maintenance Margin Ratio (MMR):

  • A risk metric that measures how close your account is to liquidation.
  • Formula:

  Margin Rate = Maintenance Margin ÷ Account Equity
  

  • The higher the margin rate, the higher the risk of liquidation.
  • When the margin rate reaches 100% or higher, your positions will be reduced or liquidated.
  • Example:
    • Margin Rate = 70% → Pre-liquidation risk alerts may be sent.
    • Margin Rate ≥ 100% → Liquidation is triggered.

3. Liquidation Conditions

Liquidation may occur when Account Equity < Maintenance Margin.

Account Equity = Wallet Balance + Unrealized PnL

3.1 Isolated Margin Mode

• Each position has its own margin.
• If one position’s equity falls below its maintenance margin, liquidation applies only to that position.

3.2 Cross Margin Mode

• Margin is shared across all positions.
• If total equity falls below the maintenance margin, liquidation may impact multiple positions.
• The liquidation system attempts to close the riskiest positions first (e.g., highest leverage or closest to liquidation).

4. Liquidation Process

Once liquidation is triggered:

1. Cancel Open Orders: All open orders for the affected contract are canceled.
2. Forced Market Closure: The position is closed at market price.

Execution Disclaimer:

• The actual execution price may differ from the indicative liquidation price due to market depth, liquidity, and slippage.
• IMBX does not guarantee execution speed, timing, or price.

5. Fees

• IMBX does not charge a separate liquidation fee.
• Standard taker trading fees apply.
• Contract-specific rules can be found on the Trading Rules page and Liquidation Details page.

6. Notifications

• Risk Alert: Sent every 1 hour when account margin reaches 70% of MM requirement.
• Liquidation Notice: Sent if liquidation occurs.
• Delivery Channels: App push, email, SMS (if supported), web notifications.

Disclaimer:

• SMS delivery may not be available in restricted or sanctioned regions.
• Notifications are a courtesy service and do not guarantee prevention of liquidation.

7. Reducing Liquidation Risk

• Add margin
• Reduce leverage
• Use stop-loss orders

8. Loss Socialization

If liquidation results in negative equity, IMBX applies a Loss Socialization mechanism:

• Losses are covered proportionally by profitable traders within the same cycle.
• Socialization is triggered immediately after liquidation, but settlement postings may be delayed.

Example:

• Total system profit = 1,000,000 USDT
• Liquidation deficit = –10,000 USDT (1%)
• Each profitable trader contributes proportionally to their realized profit:
  • Profit 10,000 → pays 100
  • Profit 1,000 → pays 10

9. Disclaimer

• Indicative liquidation prices are for reference only.
• Actual execution may vary due to slippage, market depth, and volatility.
• IMBX does not guarantee execution outcomes or offset user losses.
• Users remain solely responsible for managing risk.