Takeover Price

Note: The takeover price is also called the bankruptcy price. On the liquidation order, the price of the order is displayed as the takeover price.

Am I going bankrupt and in debt?

After liquidation, your account balance will be 0, but not negative.

What is a takeover price? How is it different from the liquidation price?

When liquidation occurs, the system will take over your position with your account equity being 0, and this price is the takeover price.

Example:

Player A holds a long position with an opening price of 30,000, and the liquidation price is 20,000. When the price drops to 20,000, the position margin rate of A is equal to the maintenance margin rate, and the remaining margin of the position is equal to the maintenance margin. In other words, when forced liquidation occurs, A's position equity is not 0, and there is still a maintenance margin left.

The real loss of A at this time:

(Opening Price - Liquidation Price) * Position Quantity = Opening Margin - Maintenance Margin

However, during liquidation, you have to pay the cost of maintenance margin, which is used to process positions after a takeover. In the end, your account equity is 0. At this time:

(Position Opening Price - Takeover Price) * Position Quantity = Opening Margin

It can be seen that the takeover price is the exit price after calculating the liquidation cost (maintenance margin). Based on this exit price calculation, A’s account equity is 0. The liquidation price on the liquidation order is the takeover price.

The takeover price will not be displayed on the K-line, it is calculated based on the equity being 0, and may not appear in reality.