How Does Liquidation Work in the Binance Portfolio Margin Account? | Binance Portfolio Margin,Binance Futures,Binance Liquidation

When does liquidation occur?

1. Liquidation based on the Unified Maintenance Margin ratio (uniMMR) level

Liquidation occurs when an account’s uniMMR falls below 1.05 (105%). In such cases, the liquidation system will take over the account, and you won’t be able to perform any transactions during the liquidation process.

When the uniMMR reaches 1.05, the system will cancel any open orders on Cross Margin to prevent additional asset open losses that could further reduce the uniMMR. If the uniMMR recovers back above 1.05 before liquidation takes place, liquidation will be canceled. Since the risk of liquidation has passed, open orders that were previously canceled may be placed again.

The reason for canceling open orders is to prevent additional asset open losses, which could further reduce equity and trigger liquidation. By canceling orders when the uniMMR reaches 1.05, the equity reduction is limited, allowing the uniMMR to recover.

To learn how to calculate uniMMR refer to What Is the Unified Account Maintenance Margin Ratio (uniMMR) And How Is It Calculated.

2. Liquidation due to negative Portfolio Margin Account Adjusted Equity Value

Additionally, liquidation can occur when your Portfolio Margin Account Adjusted Equity falls below 0, even if there are no open positions, loans, or orders in the account.

This can happen due to exchange rate fluctuations, especially in cases where a user has a negative balance in one asset and a positive balance in another. You should be aware of this possibility and manage your account balances accordingly to avoid liquidation in such situations.

For example, if you don’t have open positions, loans, or orders but you’re holding:

0.0065 BTC in your Cross Margin Wallet (worth 130 USD at an initial BTC price of 20,000 USDT/BTC)
-100 USDT in your USDⓈ-M Futures Wallet

Initially, your Portfolio Margin Account Adjusted Equity stands at 30 USD. However, should the BTC price drop to 15,000 USDT, your Adjusted Equity would fall below 0, triggering liquidation.

Liquidation process of Margin positions

When your margin position is liquidated, the margin liquidation engine will take over the assets on the account and sell them to cover the liabilities.

Liquidation process of USDⓈ-M and COIN-M positions

All liquidation orders are executed as Immediate or Cancel (IOC) orders during the liquidation process. IOC orders aim to fill as much of the liquidated position as possible. If there are any remaining positions after the partial execution of the order, they will be handled in one of two ways:

Assigned to the Insurance Fund: Some or all remaining positions may be assigned to the insurance fund. This helps to mitigate the impact of the liquidation event and contributes to maintaining the overall stability of the platform.
Assigned to ADL: For positions exceeding the maximum amount of insurance fund coverage, Auto-Deleveraging (ADL) will be triggered.

Binance applies liquidation clearance fees for both Margin and Futures positions. Please refer to the respective articles for more details on liquidation clearance fees for futures and margin positions.

Portfolio margin call notifications

Binance will notify you by email and via App notifications when your uniMMR falls below the following levels:

A first margin call will be sent when the uniMMR ≤ 2;
A second margin call will be sent when the uniMMR ≤ 1.5
Your account will be automatically changed to reduce-only mode (opening new positions and margin loans will be suspended) when the uniMMR ≤ 1.2;
You will receive a liquidation call when the uniMMR ≤ 1.05

API error codes during liquidation

When your account is in reduce-only or liquidation mode, the following order entry error codes will be in effect:

Account Status/uniMMR Range	Order Entry Response Error Code
uniMMR < 1.05	UNABLE_TRADE_LOW_LIQUIDATION (HttpStatus.BAD_REQUEST, -3048, "Unable to trade. Your margin account is currently in liquidation. Please try again once the liquidation is processed.")
1.05 ≤ uniMMR < 1.2	Futures Fapi/dapi error code: unchanged When uniMMR falls below 120%: reduce-only error code

For more details on the Binance Portfolio Margin Program, please refer to: