When Mark Price reaches liquidation price, the liquidation process will take the following steps to process liquidation:
1. All existing active orders that have yet to be fulfilled will be cancelled. If the trader had enabled Auto Margin Replenishment (AMR), canceling any existing unfulfilled active orders may free up the margin to be used. Hence, affecting the liquidation price.
2. If the position is still to be liquidated, the position would be closed at the bankruptcy price. The trader would be able to see from his account history that the position has been closed at bankruptcy price, which means that the trader has lost all of the margin used for the position, including the maintenance margin.
3. If the system is able to close the position at a price better than the bankruptcy price, the remaining margin from the position would be contributed to the insurance fund. Conversely, if the system is unable to close the price above bankruptcy price, the system would use funds from the insurance fund to cover the losses gap. Should the balance in the insurance fund be insufficient to cover the loss, Auto-Deleveraging will take over the process.