When the margin level of your position falls below the required maintenance margin level, your position will be liquidated.
Bybit adopts a Dual-Price mechanism, which consists of Last Traded Price (the price you see on the charts, price figure on the left of order book) and Mark Price (yellow price figure on the right of order book). Please be aware that Liquidation is triggered by Mark Price instead of the platform's Last Traded Price. As such, the liquidation engine will take over the liquidation process of your position only when Mark Price reaches the liquidation price of your position.
Therefore, below are some of the commonly asked questions related to this matter.
Q:Why does Bybit use Mark Price to trigger liquidation instead of LTP?
Mark Price is derived by averaging the prices from 3 major spot exchanges (Bitstamp, Coinbase Pro and Kraken) live 24/7. As compared to using LTP to trigger liquidation, this makes it much more capital intensive for whales or market manipulators to manipulate the market to maliciously trigger liquidations on the Bybit platform.
Q:I did set a stop loss for my position. Why was my position still liquidated?
Stop Losses can be triggered by either the Last Traded Price (Default), Mark Price or Index Price on Bybit. On the other hand, liquidation is triggered by Mark Price and not LTP. As such, if a trader sets their Stop Losses to be triggered by LTP or Index price and sets it very close to your liquidation price (e.g holding a Buy Long position, Stop Loss was set at 8600 and triggered by LTP when liquidation price is at 8595), it is entirely possible for the Mark Price to hit your liquidation price first before the LTP could trigger your stop loss. To further understand this point, please refer to the article below
This is the reason why your stop loss was not executed as intended.
Q:The price charts did not hit the liquidation price of my position. Why was my position still liquidated?
The prices shown on the Bybit chart are the price history and movement of the platform's LTP. On the other hand, liquidation is triggered by Mark Price and not LTP.
To view the Mark Price history on the price chart, please refer to the symbol .MBTC, Bybit
Take note to make the following adjustment for more accurate representation of the Mark Price:
-Click on the settings icon on the Mark Price bar
-Under the "Source" dropdown, select the following based on your open position
Buy/Long - "Low" Selection
Sell/Short - "High" Selection
Q;Why did my trade history show my liquidated order executing at a price higher/lower than my liquidation price?
Inside your Trade History, your liquidated position will be closed at its Bankruptcy Price (equivalent to losing all of your position's margin) instead of your liquidation price (which is based on the maintenance margin requirements base on your selected risk limit). What this means is that your trade history will show an executed price that is higher/lower than your liquidation price if you were holding a Sell/Buy position respectively.
Liquidation Price on the Asset Tab
Bankruptcy Price can be calculated with the following formula,