Strips Finance
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Liquidations

Fair Price Marking

Strips finance uses a unique mark price for the calculation of unrealised pnl and liquidations. A position's mark price is the impact price where we take into account the price impact of the position if it were to be liquidated in this instant. Strips uses this mark price to determine if an account should be liquidated.

Liquidation

Accounts whose margin ratio falls below the maintenance margin requirement of 5% may have their positions automatically closed by the liquidation engine. Positions are closed using the liquidation process described below. Profits or losses from liquidations are taken on by the insurance fund.
To prevent your position from being liquidated, consider adding more collateral to the position from the exchange.
Liquidated positions will show up in your trader positions dashboard
When an account falls below the maintenance margin threshold, the position is at risk of being liquidated. You can still add more collateral to prevent the position from being liquidated. If the position is liquidated, you will lose all your collateral in the position.
When a trader's position is liquidated by the liquidation engine, the system's auto-liquidation engine takes over the trader's position at the bankruptcy price and unwinds the position against the market AMM. In cases when markets move sharply against the position beyond the bankruptcy price, losses will be covered by the insurance fund. In the worst-case scenario, if the insurance fund is insufficient to cover claims, all positions will be auto-closed and flattened against the AMM. We view this as an extremely unlikely event based on 800+ market simulations.
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Liquidation Example:
Trader entry level = 6%
Trader collateral = 100
Current market fixed = 5%
if close now and exit level = 4.9%
Trader pnl = (4.9%-6%)/4.9%*1000 = -224.48
Trader margin = (100-224.48) / 1000= -12.44% < 5%
Trader position = 1000
The trader will be liquidated immediately but their loss will be capped at -100
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To learn how to run a Liquidator node, please contact our team at [email protected]

Frequently Asked Questions

Why am I liquidated?

  1. 1.
    Your position is liquidated when margin ratio = (collateral + PnL if you close your position now) / notional < 5%
  2. 2.
    A higher leverage may give you higher profit with lower capital committed, but also higher chance to be liquidated if the market moves against you

Where can I see my liquidated position information?

Currently, trades that are liquidated will have a checkmark
βœ”
in the "Liquidation" column in your "Trading History".
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Fair Price Marking
Liquidation
Frequently Asked Questions
Why am I liquidated?
Where can I see my liquidated position information?