This page describes the model at a high level. Liquidation parameters are part of each market’s risk configuration and are subject to change.
When it happens
As a position moves against you, its unrealized loss reduces your account equity. While equity stays above maintenance margin, the position is healthy. Once equity drops to or below the maintenance margin requirement, the position becomes eligible for liquidation. Two levers most directly affect how close you are:- Adverse price movement in the oracle / mark price of your position.
- Margin requirement changes — for example, the higher initial margin applied to RWA perps when the underlying market is closed (note that maintenance margin is not raised off-hours).
What happens to the position
When a position is liquidated, it is closed to bring the account back within its margin requirements. You keep any remaining equity after the position is wound down. The goal of the system is to close risk in an orderly way and keep the exchange solvent, not to penalize beyond the collateral at stake.Off-hours protection
For perps on assets with set trading hours, Arcus applies price bands while the underlying market is closed. Trading and the mark price are constrained to a range around the last regular-hours price, and the range only widens gradually if sustained pressure builds against a bound. These bands are designed so that a well-margined position established near the close is not liquidated purely because of thin overnight or weekend liquidity. They give the market time to consolidate before prices are allowed to move far enough to trigger liquidations. See Off-hours trading.Staying clear of liquidation
- Keep a buffer of free collateral above your maintenance margin.
- Use reduce-only stop-loss orders to exit on your own terms before maintenance margin is breached.
- Remember that opening or increasing RWA positions off-hours costs more margin.