Liquidation

The platform-wide liquidation penalty on Omni is currently set to 0.5%. This means if you get liquidated, your order is force-closed at mark price + 0.5% (for a short) or mark price - 0.5% (for a long).

If auto-liquidation is set to true (which is the case for all settlement pools on Omni), then positions will start to be forcefully closed if the pool balance falls below the maintenance margin requirements. Remember that everything works on a per pool basis, and collateral in one pool cannot count for other pools.

Due to the nature of bilateral trading, a position being closed means it will be closed for both parties. The party whose balance has fallen below the maintenance margin requirement (and thus caused the liquidation) will be tagged as the taker, and the other party the maker.

The taker will incur a liquidation penalty, which is a pool parameter. For example, if the penalty is set to 0.005 , then the taker will buy to close at the mark price + 0.5%, and sell to close at the mark price - 0.5%.

For options (on Pro), the penalty will apply to the implied volatility. So options would be bought at an implied volatility 1% higher in our previous example.