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When one futures position in a shared-margin account is liquidated, the exchange may also reduce or close other positions—including profitable ones—if their combined collateral is not enough to meet maintenance-margin requirements. It may cancel open orders and liquidate positions in stages, stopping only when the account’s margin requirements are satisfied. The exact positions affected and the order depend on the exchange and the account’s margin settings.
Why one position can put others at risk
With cross or shared margin, collateral in a defined account pool supports multiple positions. Losses on one position can therefore reduce the margin available to support the others. Liquidation is generally triggered when the relevant collateral or account equity falls below the maintenance margin required to keep positions open. Binance describes that threshold in its futures liquidation guidance; OKX’s margin calculation rules explain how cross-margin calculations include account balance and profit and loss from cross positions.
The key boundary is the margin pool, not simply the futures account label. Only positions and collateral included in the same pool share the relevant risk. Whether other balances or assets are exposed depends on the exchange’s configuration and account rules; shared margin does not by itself establish that every balance on the platform is at risk.
What the liquidation process may do
A liquidation trigger does not necessarily mean every position closes at once—or that only the position whose displayed liquidation price was reached will be affected. Exchanges use different procedures, and may continue reducing exposure until margin requirements recover or positions are exhausted.
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Cancel orders, then try a reduction
Binance says its cross-mode process first cancels open orders and then attempts to reduce a position using an Immediate or Cancel order. Liquidation can stop if remaining assets cover maintenance requirements after realized losses and the liquidation clearance fee. If losses leave a bankrupt position, Binance says its insurance fund may cover them to the extent possible; if the fund cannot, auto-deleveraging may affect opposing traders who are not bankrupt.
Reduce positions in tiers
Kai Exchange describes a different approach: it cancels unfilled orders, lowers a contract’s risk limit by one tier, and liquidates the portion above that limit. It repeats the process if the account margin ratio has not recovered. Kai says its cross-mode liquidation order is based on market liquidity. Its procedure illustrates why a position may be reduced in steps rather than closed in a single action.
Assess risk across a portfolio
Deribit describes assessing margin contribution and risk across positions. In cross-collateral accounts, it combines positions with different settlement currencies and assesses them in USD; its guidance says positions with the highest maintenance-margin requirements are liquidated first. Deribit also notes that its risk team may exercise discretion and that portfolio-margin liquidation can involve futures hedges or even opening futures positions to reduce delta risk.
Profitable positions can still be liquidated
A position’s individual profit or loss is not a guarantee that it will remain open. In cross mode, the exchange may select a profitable position if reducing or closing it helps resolve the shared account’s margin deficit. Kai explicitly says positions can be liquidated regardless of profitability; whether some positions remain depends on whether the account’s margin ratio recovers. A displayed liquidation price for one contract therefore cannot, by itself, tell you which other positions the exchange may close.
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Cross margin and isolated margin have different boundaries
OKX defines cross margin as sharing the margin balance among open positions, while isolated margin assigns margin to an individual position. The practical consequence is that a loss in a cross-margin pool can affect other positions in that pool; isolated margin generally confines the margin assigned to the isolated position.
Deribit offers a specific example of how account configuration can change the boundary: in its segregated standard-margin mode, liquidation is confined to the asset that lacks margin, while other assets are not affected. In cross-collateral mode, positions across settlement currencies are assessed together. These are venue-specific rules, not a universal definition of every exchange’s margin system.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What to check in your exchange’s rules
Before relying on a particular liquidation sequence, identify the exchange, product, margin mode, and account boundary. Then check the rules for these points:
- Shared pool: Which positions and assets contribute to the same margin calculation?
- Trigger: What margin threshold applies, and which reference price does the exchange use for liquidation?
- Orders: Are open orders canceled when liquidation begins?
- Position selection: Are positions reduced incrementally or liquidated together? Does the exchange prioritize liquidity, maintenance-margin contribution, or another factor?
- Stopping condition: Does liquidation stop once margin requirements recover, or can it continue under other conditions?
- Shortfall handling: What fees apply, and how do bankruptcy procedures, insurance funds, and auto-deleveraging work?
Binance, Kai, and Deribit describe materially different processes, so there is no single liquidation order that applies to all shared-margin futures accounts. Consult the rules for your specific account rather than assuming that one contract will always be closed first or that liquidation will stop after it is reduced.
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Liquidation safeguards do not guarantee protection
Liquidation fees can add to losses, and insurance funds are not a promise that every shortfall will be covered. Binance describes possible auto-deleveraging when its insurance fund cannot cover losses. Deribit says its liquidation fee is assigned to its insurance fund. The effect of these mechanisms depends on the venue’s rules and the circumstances of the liquidation.
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