> For the complete documentation index, see [llms.txt](https://docs.bean.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bean.exchange/trading-perp/liquidation.md).

# Liquidation

#### Liquidation Mechanism

* **Trigger Condition**: When (collateral - losses - fees) falls below threshold
* **Threshold Levels**:
  * Non-synthetic markets: 0.4% - 1% of position size
  * Synthetic markets: Higher thresholds for safety
  * Newly listed markets: 0.45%+ for volatility
* **Price Calculation**: Based on oracle price, not including price impact
* **Actual Liquidation**: Applies real positive/negative price impact when closing

#### Liquidation Fees

* **Fee Structure**:
  * 0.2% for fully backed markets
  * 0.3% for synthetic markets
  * 0.45% for high volatility/new markets
* **Fee Deduction**: Taken from remaining collateral
* **Remaining Collateral**: Returned to account after fees

#### Prevention Strategies

* **Monitor Liquidation Price**:
  * Check regularly, especially with >10x leverage
  * Consider borrow and funding fee accumulation
  * Liquidation price is dynamic, not static
* **Add Collateral**: Use "Edit" button to deposit and reduce risk
* **Reduce Leverage**: Partially close position to increase safety margin
* **Set Stop Loss**: Automatic closure before liquidation
* **Balanced Positions**: Avoid max leverage in volatile markets

#### Auto-Deleveraging (ADL)

* **Applies To**: Synthetic markets only
* **Trigger**: When pending profits exceed pool threshold
* **Process**:
  * Most profitable positions deleveraged first
  * Partial or full automatic closure
  * Ensures market solvency
  * All profits payable at closure
* **Prevention**: Occurs in extreme market moves, rare in fully backed markets
* **Notification**: Interface shows ADL risk levels

#### Risk Indicators

* **Liquidation Distance**: Percentage from current to liquidation price
* **Health Factor**: Position safety metric (green/yellow/red)
* **Fee Accumulation**: Real-time borrow and funding cost display
* **Pool Utilization**: Higher utilization = higher risk of ADL (synthetic markets)
* **Volatility Alerts**: Warnings during high volatility periods