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What is partial liquidation on KuCoin Futures?
KuCoin's partial liquidation automatically closes a portion of your futures position to prevent total loss, differs from full liquidation by preserving part of the trade.
Jul 23, 2025 at 04:42 am
Understanding Partial Liquidation on KuCoin Futures
Partial liquidation is a risk management mechanism used by KuCoin Futures when a trader’s position nears the liquidation price but still holds some margin value. Instead of closing the entire position at once—which could result in unnecessary losses—KuCoin closes only a portion of the position to bring the margin ratio back to a safer level. This helps traders avoid complete loss of their position while still protecting the exchange from insolvency due to negative balances. Partial liquidation only occurs when the mark price reaches the liquidation price, not the stop-loss or take-profit levels. It is automated and executed instantly without user input.
How Partial Liquidation Differs from Full Liquidation
In full liquidation, the entire position is closed when the margin ratio hits 100%. This means the trader loses all their initial margin and any unrealized profits. In contrast, partial liquidation preserves part of the position by reducing the leverage and size. The key difference lies in how much of the position is closed—partial targets a calculated portion, while full removes everything. This gives traders a chance to recover if the market moves favorably after the partial closure.
Step-by-Step Process of Partial Liquidation on KuCoin
When a position is at risk, KuCoin automatically triggers partial liquidation using a predefined algorithm. Here’s how it works in practice:
- The system calculates the minimum position size to close based on the current margin ratio, leverage, and maintenance margin requirements.
- It reduces the position size proportionally, not by a fixed dollar amount, so larger positions lose more contracts or units.
- The remaining position continues to be active with a recalculated liquidation price, which may now be further from the current market price.
- The process may repeat multiple times if the price continues to move against the position and triggers additional partial liquidations.
How to Check for Partial Liquidation Events
Traders can monitor partial liquidation events directly in their KuCoin Futures account: - Navigate to the Futures section and select Positions.
- Click on the specific position to view its history and status.
- Under the Liquidation History tab, you’ll see timestamps, amounts liquidated, and remaining position size.Each entry will clearly state “Partial Liquidation” along with the exact quantity removed from your position. This transparency allows traders to assess whether their risk settings (like leverage or stop-loss) need adjustment.
Strategies to Avoid Partial Liquidation
While partial liquidation prevents total loss, avoiding it altogether is preferable. Traders can take proactive steps: - Use lower leverage to reduce the sensitivity of the position to price swings.
- Maintain a healthy maintenance margin buffer by adding more margin manually if the ratio approaches dangerous levels.
- Set custom stop-loss orders to exit before the system triggers liquidation.
- Monitor funding rates and mark price movements closely, especially during high volatility periods like news events or macroeconomic data releases.
Common Misconceptions About Partial Liquidation
Some traders assume that partial liquidation is optional or can be canceled. This is false—it is an automated safety mechanism. Others believe it only happens once per position, but multiple partial liquidations can occur in succession if the price continues moving unfavorably. Another myth is that partial liquidation affects only isolated positions; in cross-margin mode, it may impact other open positions sharing the same margin pool.
Frequently Asked QuestionsWhat happens to my unrealized P&L after a partial liquidation?Unrealized P&L is recalculated based on the new position size after the partial closure. If the remaining position is still in loss, the unrealized loss continues to apply only to the reduced amount—not the original size.
Can I manually close part of my position to avoid partial liquidation?Yes. Manually reducing position size before reaching the liquidation threshold can prevent automatic partial liquidation. This gives you control over timing and price execution rather than relying on the system.
Does partial liquidation affect my isolated margin settings?Yes. In isolated margin mode, only the margin allocated to that specific position is used for liquidation calculations. After partial closure, the remaining margin is retained for the reduced position size.
Is there a fee for partial liquidation on KuCoin Futures?No separate fee is charged for partial liquidation itself. However, standard taker fees apply when the system closes part of your position, just as with any market order execution.
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