What Is Liquidation in Perpetual Trading?

Liquidation is the forced closure of a Crypto Futures position that happens when your margin falls below the maintenance margin required to keep it open. The exchange closes the position automatically at that point and the clearing house, Kliring Komoditi Indonesia (KKI), takes it over; on Cross Margin your USDT margin balance is reset to 0, while on Isolated Margin you lose only the margin allocated to that position. The higher the leverage used, the smaller the price move it takes to trigger liquidation, because leverage determines how much of a buffer sits between your entry price and the point where your margin runs out. Liquidation exists as a mechanism to stop a losing position before its losses grow further, and understanding exactly what triggers it — and what it costs you — is central to managing risk in any leveraged perpetual position.

• Liquidation is triggered off the Mark Price — a weighted average price across major global crypto exchanges — not the last traded price on Pluang's own order book, which reduces the chance of a short-lived spike causing an unnecessary liquidation.
• Example: a $50 margin position at 10x leverage controls $500 of exposure. A 10% adverse move wipes out the $50 margin, and the position is liquidated before the loss can grow further. At 25x leverage, the same $50 margin controls $1,250 of exposure, so only a 4% adverse move is needed to reach the same outcome.
• Whether liquidation affects only that position or your wider Futures balance depends on the margin mode you're using — Isolated Margin caps the loss to that position's own allocated margin, while on Cross Margin your USDT margin balance is reset to 0 and the loss appears in your Realised P&L.
• Margin call warnings precede liquidation in normal conditions, giving you a window to add margin or reduce exposure — but in fast-moving markets, a position can move from a warning stage to liquidation quickly, so the warning isn't a guaranteed grace period.
• Liquidation is the single biggest risk in leveraged perpetual trading — the higher the leverage, the thinner your buffer against ordinary price swings, which is why leverage choice matters as much as market direction.

Related questions:

Q: What triggers liquidation in perpetual trading?
Liquidation is triggered when your margin balance falls below the maintenance margin required to keep a position open, after margin call warnings have already fired under normal conditions. The exchange then closes the position automatically and the clearing house, Kliring Komoditi Indonesia (KKI), takes it over; any remaining profit or loss from the liquidated position goes to the exchange's insurance fund, managed by KKI. This process is fully automated and doesn't wait for you to confirm anything.

Q: Does higher leverage make liquidation more likely?
Yes. Higher leverage lowers your tolerance for price volatility, so a smaller adverse move is enough to trigger liquidation. A position at 25x leverage can be liquidated by a move roughly a quarter the size of what it would take at 10x, which is why choosing leverage carefully matters as much as picking the right direction. Many new traders underestimate how much leverage compresses their margin for error.

Q: Is the last traded price used to trigger liquidation?
No. Liquidation uses the Mark Price, a weighted average across major global exchanges, not the last traded price alone, specifically to avoid triggering liquidations off brief, thin-liquidity price spikes on a single order book that don't reflect the broader market. This distinction protects traders from being liquidated by momentary noise rather than a genuine, sustained price move that reflects real market conditions.

Q: Can liquidation happen without any warning first?
Normally no — margin call warnings come first, but in fast-moving markets a position can move quickly from margin call territory to liquidation, leaving little practical time to react once the warning appears. This is exactly why monitoring your position actively during volatile periods matters more than relying on notifications alone, since the gap between warning and liquidation can shrink sharply.

Q: Does liquidation always wipe out my entire Futures balance?
Not always. Your margin mode determines the outcome — on Isolated Margin you lose only the margin allocated to that specific position and the rest of your balance is unaffected, while on Cross Margin your USDT margin balance is reset to 0 and the loss appears in your Realised P&L. Choosing between the two is effectively choosing how contained you want your worst-case outcome to be, and that choice should be made before opening the position, not after.