Why Your Order Margin Hits Zero and Your Liquidation Price Adjusts: Explained

Understanding Order Margin and Liquidation Dynamics

In certain scenarios where a position remains open for a long time, users may experience a unique situation where their order margin reaches zero while their liquidation price adjusts (moves up or down). This occurs primarily due to the cumulative effect of funding fees over an extended period.

How This Happens:

• As funding fees accumulate over time, it can gradually reduce the available margin in a user's position
• When the initial margin becomes fully consumed by these fees, the order margin can effectively become zero
• The platform's risk management system may then adjust the liquidation price to account for the remaining position value

Why This Isn't Cause for Concern:

• The position remains active and can still be managed by the trader
• Traders can prevent this by:
  1. Monitoring their position's margin regularly
  2. Adding additional funds to maintain margin buffer

Recommended User Actions:

• Periodically check your position's margin and funding fee impact
• Be prepared to add margin or adjust your position if fees are consuming your initial margin