# Liquidation Price

The price when the position is liquidated.

The liquidation price for a position is calculated based on the entry price and amount of collateral provided. The higher the leverage, the lower the collateral amount, therefore the higher the risk of liquidation.

When a position is liquidated, the user loses all the collateral reserved on the position.

Positions can only be liquidated using the price from the Oracle. When our server detects a position due for liquidation based on the Mark Price, it requests the last traded price from the Oracle.

If the liquidation price was generated by a short spike in the mark price and the price swiftly exits the liquidation range, the position will not be liquidated as the price provided by the Oracle comes with a delay of approx. 1min. So if the liquidation price was touched for less than 1 minute, the user's position is safe.

## Liquidation Price Formula

$LP = NL ± P * C$

### Definitions

 Parameter Description LP Liquidation Price NL Net Liquidation Price P Entry Price C Liquidation Coefficient M Margin (Collateral) MOV Allowed price movement before liquidation FC Funding Cost S Position Size FB Funding Blocks (the number of blocks the position is opened for) FR Funding Rate (rate per block) L Leverage MM Maintenance Margin

### Formulas

 Parameter Formula NL P ± MOV MOV (M - FC) / S FC S * P * FB * FR C MM / L L P * S / M

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Use Stop-Limit (Stop-Loss) orders to prevent the position from getting liquidated!