Isolated Mode

When the position margin ratio reaches 100%, the position will be triggered liquidation with a liquidation transaction fee and a liquidation clearance fee. Please note that the position is triggered by the margin ratio, liquidation price is for reference only.

Cross Mode

When the position margin ratio reaches 100%, the position will be triggered liquidation with a liquidation transaction fee and a liquidation clearance fee. Please note that the position is triggered by the margin ratio, liquidation price is for reference only. In addition, all the cross mode positions share the same margin, so as long as one cross mode position triggers liquidation, all the cross mode positions will be closed regardless of whether they are profitable or not.

Example: FIBO holds a 1.5 million BTCUSDT long position + 1 million BTCUSDT long limit order.

When the position margin ratio ≥100%, the system will first cancel the 1 million BTCUSDT limit order. This releases a portion of the margin to increase the available balance in an attempt to meet the maintenance margin requirement. If the position is still not margined to the maintenance margin requirement after the limit order is canceled, the liquidation engine will take over the position.

The specific liquidation process is as follows:

• Cross Mode: Cancel all pending orders (including all pending orders in Isolated Mode)
• Isolated Mode: Cancel all pending orders including TP/SL orders for the specified trading pair (other trading pairs are not affected)
• If the margin maintenance requirement is not met at this point, the position will be taken over by the liquidation engine at the bankruptcy price.

When the liquidation is executed at the bankruptcy price, the following scenario occurs:

• If the position can be executed in the market at a price better than the bankruptcy price, the liquidation clearance fee will be added to the insurance fund.
• If the position cannot be executed at a price better than the bankruptcy price, the breakout loss will be covered by the insurance fund.

Automated Negative Balance Clearance

If a trader’s account balance is negative due to one or more Bankrupt Positions, BYDFi will use the Futures Insurance Fund to automatically cover the deficit in the trader's account and absorb the losses, to the extent possible.
For user accounts that meet the following requirements, our system will automatic clearing of negative balances will occur every 10 minutes:

• For negative balances in USDT-M accounts, there are no open positions in the account. (Both Cross / Isolated Mode)
• For negative balances in Coin-M accounts, there are no open positions in the account. (Both Cross / Isolated Mode)
• The user did not transfer any funds to deficit losses in the account after liquidation.

Note:

• Isolated Margin Ratio = (Maintenance Margin + Closing Fee) / (Position Margin + Unrealized PNL) * 100%
• Cross Margin Ratio = (Maintenance Margin + Closing Fee) / (Wallet Balance + Bonus Balance - Isolated Frozen Margin + Cross Margin Unrealized PNL) * 100%
• Isolated Margin Liquidation Clearance Fee≈ Position Margin + Liquidation PNL - Liquidation Transaction Fee
• Cross Margin Liquidation Clearance Fee ≈ Wallet Balance + Liquidation PNL - Liquidation Transaction Fee
• Liquidation Transaction Fee = Position Value * Quantity * Mark Price * Liquidation Transaction Fee Rate

Risk Control Policy

When the margin balance is insufficient, we will send a margin call and a liquidation notice to the user by email. This feature serves as a risk alert that cannot be guaranteed to be sent or delivered in a timely manner. Under certain circumstances (including due to network congestion and poor network conditions), you may be unable or delayed in receiving email alerts during your use of the service, and BYDFi reserves the right to send notifications without obligation.

To prevent excessive market risk concentration and manipulation, BYDFi limits individual users' position size. Orders exceeding these limits will be rejected. Additionally, we strictly prohibit users from circumventing position limits through any means, such as multiple accounts, identity masking, third-party account control, or exploiting system vulnerabilities, to maintain market fairness.