Liquidation starts before zero equity
A venue needs room to close a position while resources remain. Maintenance margin and estimated closing costs therefore place the liquidation threshold before the simplified bankruptcy point.
Bankruptcy price is an accounting boundary
The bankruptcy price describes where the position would exhaust its assigned equity under the venue formula. It is not a promised fill price and is not normally the point at which a trader remains in control.
Treat displayed prices as dynamic estimates
Funding, added collateral, partial closes, fees, margin tiers, and mark-price changes can move the displayed thresholds.
- Use the venue's current formula
- Keep a buffer beyond planned exits
- Recheck after changing size or collateral
Why the gap exists
A risk system needs enough remaining equity to pay closing costs and absorb adverse execution while it reduces exposure. That is why intervention usually begins before a simplified zero-equity boundary. Maintenance ratios, liquidation fees, position tiers, and the valuation price all influence the distance.21
The terms are not standardized across every perpetual design. One provider may transfer positions to liquidators and target restored initial margin, while another may use keeper automation and retain remaining collateral at liquidation. Read each provider’s formula and process as a complete system.13
What can move the threshold after entry
Funding or rollover charges reduce equity, added collateral increases it, partial closes change notional, and margin tiers can change as size changes. A displayed liquidation price should therefore be monitored as dynamic account state, not recorded once in a trade journal and forgotten.23