Risk & Liquidations
Perpetual contract trading involves leverage, which amplifies both potential gains and potential losses.
When an account or position meets the applicable liquidation conditions, the system may reduce part of the position or close it entirely. The outcome depends on margin mode, position risk and the platform’s liquidation rules.
Understanding liquidation mechanics is critical to managing trading risk on 6MM.
What Is Liquidation?
When an account or position meets the applicable liquidation conditions, the system may reduce part of the position or close it entirely. The outcome depends on margin mode, position risk and the platform’s liquidation rules.
What Causes Liquidation?
Liquidation may occur due to:
- Adverse price movement
- Excessive leverage
- Insufficient available margin
- Accumulated fees or funding payments
High leverage significantly increases liquidation risk.
Mark Price–Based Liquidation
6MM uses the mark price, not the last traded price, to determine liquidation.
This helps:
- Reduce liquidations caused by short-term price spikes
- Improve fairness during volatile market conditions
The mark price reflects a more stable market reference.
Liquidation Process
Risk assessment uses account or position equity, maintenance margin and the applicable risk indicators. Warnings, order restrictions, partial reduction or full liquidation may apply under the platform’s rules. A warning or partial reduction is not a guaranteed step before full liquidation.
What Happens After Liquidation?
After partial reduction, the remaining position stays open and continues to carry market and margin risk. Check the reduced quantity, remaining quantity and updated margin requirements.
After full liquidation, the affected position is closed. This does not by itself mean that every position in the account has been closed.
Check actual executions, realized profit and loss, applicable fees and balance records. Margin release and the amount available for transfer depend on the final account state and any remaining obligations; do not treat a liquidation status alone as proof that funds are available.
How to Reduce Liquidation Risk
- Use lower leverage
- Maintain sufficient available margin
- Set Stop Loss orders early
- Monitor margin ratio regularly
- Avoid trading during extreme volatility
Risk management is more important than trade frequency.
Liquidation vs. Stop Loss
Stop Loss helps prevent liquidation, but cannot fully eliminate risk.
Summary
On 6MM:
- Liquidation protects both users and the system
- Risk is managed in real time using mark price and margin rules
- Responsible leverage use is essential
Understanding liquidation mechanics is a key step toward safe and sustainable perpetual trading.
Related risk guides
- Margin Rules: margin ratios and maintenance requirements.
- Leverage Mechanics: how exposure amplifies gains and losses.
- Take Profit / Stop Loss: automated exits and their limitations.
- Position API: query position and margin state programmatically.