What is Liquidation Price?
Liquidation price is the price at which a futures contract will be automatically closed out in the event of a margin call. It is the price at which a trader's position is closed out if the price of the underlying asset falls below the liquidation price. Liquidation price is also known as the stop-loss price.
Binance's Liquidation Price for Futures Trading
Binance is one of the largest cryptocurrency exchanges in the world and offers a range of futures trading products. The liquidation price on Binance's futures trading platform is determined by the Mark Price. The Mark Price is calculated using an algorithm which takes into account the prices of the underlying assets on other major exchanges. The liquidation price is then set at a certain percentage above or below the Mark Price.
The liquidation price is dynamic and changes depending on the current market conditions. When the Mark Price moves above the liquidation price, the position is closed out and the trader will incur a loss. The liquidation price is also used to trigger margin calls when the Mark Price falls below the liquidation price.
Conclusion
In conclusion, liquidation price is the price at which a futures contract will be automatically closed out in the event of a margin call. Binance's liquidation price for futures trading is determined by the Mark Price, which is calculated using an algorithm that takes into account the prices of the underlying assets on other major exchanges. The liquidation price is dynamic and changes depending on the current market conditions.
