Gate uses Account Initial Margin Level and Account Maintenance Margin Level to evaluate the risk level of the account. Our system will perform the following risk control measures based on the relevant thresholds for spot accounts with Spot Margin Trading enabled.
1. Auto-Cancel
When the Account Initial Margin Level is below 100%, the system will auto-cancel spot open orders to ensure more margin is available in the account.
Cancel Order: the system will start to cancel spot open orders in descending order of haircut loss. Auto-cancel will not stop until the Account Initial Margin Level is no less than 100%.
2. Forced Repayment
When the Account Maintenance Margin Level is no more than 110%, the system will auto-repay the debt with assets in the account to ensure more margin is available. Only loans borrowed with the same coins that are available in your account will be repaid. The assets of other coins in your account will not be sold for repayment.
Example: Account Status:
| Coin | Account Balance | Borrowed |
|---|---|---|
| USDT | 3000 | 0 |
| BTC | 1 | 1.5 |
| ETH | 0 | 1 |
Due to market volatility, the Account Maintenance Margin Level falls below 110%, triggering forced repayment. The borrowed 1.5 BTC will be repaid with 1 BTC, and the borrowed 1 ETH will not be repaid as there is no available balance of ETH. After forced repayment, the account status is as follows:
| Coin | Account Balance | Borrowed |
|---|---|---|
| USDT | 3000 | 0 |
| BTC | 0 | 0.5 |
| ETH | 0 | 1 |
3. Liquidation
When Account Maintenance Margin Level is below 100%, liquidation will be triggered to reduce the risk level of your account.
Liquidation will start from canceling all spot open orders to reduce the loss of Account Margin Balance caused by haircut losses, and will not stop until the Account Maintenance Margin Level is above 100%.
If the Account Maintenance Margin Level is still no more than 100% after all orders have been liquidated, the currency with a larger loan amount will be repaid first. When selling assets to repay, currency with the highest USD value will be sold first. After selling assets, the system will take 2% of the loan amount and put it into the insurance funds that cover losses incurred when users' accounts go bankrupt. The liquidation will not stop until the Account Maintenance Margin Level is above 100%.
Summary
| Conditions | Actions |
|---|---|
| Account Initial Margin Level < 100% | Auto-Cancel |
| Account Maintenance Margin Level <= 110% | Forced Repayment |
| Account Maintenance Margin Level <=100% | Liquidation |
Gate reserves the final right to interpret the product.
