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

# Liquidations

Liquidation is triggered when an account's margin ratio falls to or below 100% (effective margin ≤ maintenance margin). Ticko uses a progressive liquidation process that attempts to restore account health with minimal market impact.

**Liquidation price:**

A position's liquidation price is the price at which the account's effective margin equals its maintenance margin requirement.

For cross-margin accounts, the liquidation price depends on all positions and collateral in the account. For isolated-margin positions, the liquidation price depends only on the assigned margin for that position.

**Progressive liquidation (cross margin):**

When margin ratio breaches 100%, the system executes the following steps in order. If account health is restored at any step, the process stops and the remaining positions stay with the trader (partial liquidation).

1. **Cancel orders**: All open orders are cancelled to release reserved margin.
2. **Net hedge positions**: Opposing long and short positions on the same contract are netted to reduce gross exposure without market impact.
3. **Reduce positions**: Positions are reduced in chunks via IOC limit orders.
4. **Backstop liquidation**: If the margin ratio falls below the takeover threshold despite the above steps, all remaining positions and collateral are transferred to a Ticko backstop liquidator at the bankruptcy price.

**Isolated margin liquidation:**

Isolated positions are liquidated independently using the same progressive steps, scoped to the individual position and its assigned margin. Losses are contained to the isolated margin and do not affect the rest of the account.

**Bankruptcy price:**

The bankruptcy price is the price at which closing the position would leave the account with exactly zero equity after fees. It represents the worst execution price during liquidation. Any loss beyond the bankruptcy price is absorbed by the backstop liquidator.


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