Clearing Process and Clearing Price Calculation
2025 Settlement Update
By 2025, Gate (Gate.io) has optimized its clearing process through the following key improvements:
-Reduce 30% of liquidation slippage By enhancing the liquidity pool, slippage during the liquidation process is reduced, improving liquidation efficiency.
-5-second settlement alert notification Before the settlement is about to occur, the system will issue a warning notification to users 5 seconds in advance, giving users more time to react.
-Partial Settlement Options Added some liquidation options that allow users to retain part of their positions when facing liquidation, reducing losses.
-Pre-settlement simulation tool The platform now provides a pre-liquidation simulation tool that allows traders to test various market scenarios before opening positions, helping them understand potential liquidation risks in advance.
-Strengthened Insurance Fund The insurance fund has been strengthened, providing better protection against market fluctuations and ensuring a stable clearing mechanism across all contract types.
Clearing process
Forced liquidation process
Gate uses the marked price as the basis for determining whether to liquidate a user’s position. The effect of forced liquidation varies depending on whether the user is using isolated margin or cross margin.
- Cross Margin Leveraged Mode When the margin balance of this position falls below the maintenance margin level, the position will be forcibly liquidated. The margin balance includes unrealized profits and losses. In a dual-position mode, since long and short positions are independent, extreme market fluctuations may lead to both being liquidated separately.
- Full Margin Leverage Mode All available balance is margin. When the available balance and the current position margin are below the maintenance margin level, the position will be forcibly liquidated. The margin balance includes unrealized profit and loss. In the bidirectional holding mode, only when the net loss in both directions plus all available balance and margin is still below the maintenance margin level will it be forcibly liquidated.
When a forced liquidation is triggered, the system will sequentially activate the market itself, the insurance fund, and the automatic position reduction system to complete the forced liquidation. The specific process is as follows:
- If the mark price exceeds the liquidation price, the liquidation process will be initiated.
- Unfilled orders such as open orders and strategy orders will be canceled.
- When placing an order at the bankruptcy price, if the market price is better than the bankruptcy price, it will be filled at the market price first.
- If the order is filled, the process ends.
- If the mark price exceeds the bankruptcy price, the insurance fund and automatic reduction of positions will be activated.
- If the mark price does not exceed the bankruptcy price, the position will be locked until the liquidation order is filled.
After triggering a forced liquidation, users can click on the forced liquidation details in the trading history/close history to view detailed information.
Clearing Price Calculation
When the margin balance of a user’s contract position falls below the maintenance margin level, the position will be forcibly liquidated by the trading system. After forced liquidation, the user will lose all position margin. In actual contract trading, when the mark price reaches the liquidation price, it will trigger forced liquidation.
Liquidation Price Calculation Formula
The calculation formula for the liquidation price varies depending on the type of contract.
Ordinary Long, Dual-Currency Contract Liquidation Price Calculation Formula
Liquidation Price = (Opening Price ± Margin / Contract Multiplier / Position) / [1 ± (Maintenance Margin Ratio + Fee)]
The addition or subtraction in the formula depends on the direction of the contract; for long positions, subtract, and for short positions, add.
The calculation formula for the liquidation price of a reverse contract.
Liquidation Price = Position Opening Average Price(1±Maintenance Margin Ratio±Trading Fee)/（Position±Margin*Opening Price Average）
The addition or subtraction in the formula depends on the direction of the contract, if it is long then add, if it is short then subtract.
Precautions
- The position refers to the number of contracts. You can view the maintenance margin ratio and contract multiplier in the contract information.
- Single fee: 0.075%
Example
The contract shown in the above image is a long position contract, with an opening price of 2399, a margin of 25.79, a position of 1 ETH, and a maintenance margin ratio of 0.5%.
According to the calculation formula for the liquidation price of a standard forward contract:
Liquidation Price = (Opening Price - Margin / Contract Multiplier / Position) / [1 ± (Maintenance Margin Ratio + Taker Fee)]
The calculation of the liquidation price for this contract is as follows:
Liquidation Price = (2399-25.79⁄0.01/100)/【1 -(0.5% + 0.075%)】
Liquidation Price = 2373.21⁄0.99425
Liquidation Price ≈ 2386.94
The same as the liquidation price shown in the figure.
Conclusion
Through the above optimizations, Gate (Gate.io) has made its clearing process more efficient and transparent in 2025, providing better protection for traders. Traders can use pre-clearing simulation tools to understand clearing risks in advance and utilize partial clearing options to reduce losses. Meanwhile, the strengthened insurance fund also provides better protection against market volatility.
Please note that Gate may restrict or prohibit all or part of the services from restricted areas. Please read the user agreement for more information, link:https://www.gate.io/en/user-agreement.
