🩸Understanding Liquidations, Margin Management, and Account Health

Liquidations Explained

A liquidation event on PriveX occurs when a trader's positions are forcibly closed due to insufficient margin. This happens when the trader's Equity Balance falls below the Maintenance Margin (CVA) due to adverse market movements.

Important: PriveX operates on a cross-margin system. This means your Equity Balance considers your entire account balance, and liquidations will result in the loss of your entire account balance. To manage liquidation risk, consider creating isolated sub-accounts.

The "Account Overview" section on the main trading interface provides essential indicators to help you manage your account health effectively.

Estimated Liquidation Prices

PriveX helps users estimate liquidation prices for both new and open positions. Remember, these are estimates and will change based on your account balance and other open positions.

• For new trades: View estimated liquidation price in the trade details before execution.

• For open positions: Check the "Positions" tab for estimated liquidation prices.

Caution: Due to the cross-margin nature of accounts, there's no fixed liquidation price for individual positions. Monitor your "Remaining Equity to Liquidation" to avoid account liquidation.

Understanding Account Health Account Health is a percentage representing the overall risk level of your trading positions. It provides a quick overview of your safety buffer before potential liquidation.

Calculation:

Account Health = (equity - maintenanceMargin) / (allocatedBalance - maintenanceMargin) Maintenance Margin (CVA)

Credit Valuation Adjustment (CVA) is the overall Maintenance Margin required to keep your account solvent. It's crucial to maintain your Equity Balance above this value to avoid liquidation.

• When opening a position, you'll need to deposit a corresponding CVA amount based on position size, contract, and leverage.

• Higher leverage positions require a higher CVA. Use caution with high leverage to avoid liquidations.

• The total CVA for all open positions is displayed in the "Account Overview" tab.

Note: In the event of liquidation, the entire account CVA is lost and remitted to the counterparty. Equity Balance Equity Balance represents your total account value at any given moment, including all open positions.

Calculation:

Equity Balance = Allocated Balance + Unrealized Profit and Loss (uPNL)

Warning: If your Equity Balance falls below your Maintenance Margin (CVA), your account will be liquidated, and your CVA locked in trades will be forfeited. Remaining Equity to Liquidation This indicator shows how much equity balance you have left before your account faces liquidation.

Calculation:

Remaining Equity to Liquidation = Equity Balance - Maintenance Margin (CVA)

Caution: When this value reaches 0, your entire account will be liquidated. Understanding Account Balance Components

Locked Margin

The total margin engaged across all live positions, acting as a buffer to prevent excessive position openings.

Available for Orders

Represents the funds still accessible for placing new orders.

Calculation:

Available for Orders = Equity Balance - Locked Margin - Maintenance Margin