In shared (cross) margin, liquidation of one futures position can put other positions in the same margin pool at risk. The exchange may reduce or close additional positions—including profitable ones—if needed to bring account equity back above maintenance requirements. Which positions are affected, and in what order, depends on the exchange and account configuration.
Why one position can affect the rest
Cross margin pools collateral across eligible positions rather than assigning a separate margin balance to each one. A loss on one contract can therefore reduce the equity available to support all positions in that pool. OKX describes cross margin as sharing the account’s margin balance among open positions; isolated margin instead assigns margin to an individual position. See OKX’s futures margin calculation rules.
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Liquidation is generally triggered when the collateral or account equity available to support positions falls below the applicable maintenance-margin requirement. The precise inputs and trigger calculation vary by venue and mode. A position’s displayed liquidation price is not, by itself, a guarantee that only that position will be closed.
What the exchange may do during liquidation
Liquidation does not necessarily mean every position closes at once. Exchanges can cancel orders, reduce positions in stages, reassess margin, and continue only if the account still fails its requirements. Their procedures differ.
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Cancel orders and attempt a reduction
Binance says its cross-mode process first cancels open orders, then attempts to reduce a position using an Immediate or Cancel order. If remaining assets satisfy maintenance requirements after realized losses and the liquidation clearance fee, the process stops. If not, liquidation can continue. Binance also describes insurance-fund coverage for bankrupt positions to the extent possible, with auto-deleveraging potentially affecting opposing traders if the fund cannot cover losses. These mechanisms are not a promise that a trader will avoid losses. Details are in Binance’s Futures liquidation protocols.
Reduce positions in tiers
Kai Exchange describes canceling unfilled orders, lowering the contract’s risk-limit tier, and liquidating the amount above the adjusted limit. It checks whether the account margin ratio has recovered and repeats the process if necessary. Kai says cross-mode liquidation order is based on market liquidity, and a position can be selected regardless of whether it is profitable. Depending on whether the account recovers, some positions may remain or all may be sold. See Kai’s forced-liquidation process.
Assess risk across a portfolio
Deribit describes liquidation based on portfolio margin contribution and risk. In cross-collateral accounts, positions with different settlement currencies are combined and assessed in USD; its guidance says positions with the highest maintenance margin are liquidated first. Deribit also notes that liquidation can involve risk-team discretion and, in portfolio margin, may include futures hedges or even opening new futures positions to reduce delta risk. Its liquidation documentation explains the venue-specific process.
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The account boundary determines what is exposed
Only positions and collateral included in the same margin pool share this liquidation risk. “Shared margin” does not establish that every balance or every account on an exchange is exposed. Check which products, assets, and subaccounts are actually included in the pool.
Deribit illustrates the distinction: in its segregated standard-margin mode, liquidation is confined to the under-margined asset, while cross-collateral mode assesses the portfolio together. Other exchanges may define account boundaries and modes differently, so their rules must be checked separately.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What to check in your exchange’s rules
- Which positions and assets belong to the shared margin pool.
- What triggers liquidation and which price reference is used.
- Whether open orders are canceled when liquidation begins.
- Whether positions are reduced in stages or liquidated together.
- How the exchange selects positions for reduction, such as by liquidity or maintenance-margin contribution.
- Whether liquidation stops when the account meets maintenance requirements again.
- How liquidation fees, bankruptcy, insurance funds, and auto-deleveraging are handled.
There is no universal liquidation sequence: Binance, Kai, and Deribit describe different procedures. Consult the rules for the exact exchange, product, margin mode, and account setup before assuming which contract will close first or whether liquidation will stop after one reduction.
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