Partial vs Full Liquidation in Crypto Futures

An alert can describe the start of a liquidation process rather than its final result. The engine may cancel exposure-increasing orders, close part of a position or transfer the remaining exposure to a backstop. Those actions leave very different accounts behind. Start with the current position quantity and the completed executions, not the notification’s headline.

A fill is an execution; it is not necessarily the whole liquidation. One forced order can produce several fills at different prices. Conversely, an engine can send multiple reduction orders during one event. Counting rows in the history therefore does not tell you how many positions were liquidated or whether the process has finished. Add the executed quantities and reconcile them against the position that existed before the event.

Full liquidation of one isolated SOL position can leave a spot wallet or separate subaccount intact. In cross margin, the affected boundary can include several positions. Interpret “full” against the margin pool involved.

Closing contracts reduces exposure. It does not deposit the contracts’ full sale value into a perpetual-futures account. Existing unrealized profit or loss becomes realized on the closed quantity; execution away from the valuation price and applicable charges change total equity. Confusing sale value with returned collateral makes a damaged account look far healthier than it is.

Consider a constructed linear SOL perpetual account with a 1,250 USDT wallet balance after earlier charges. It holds a 100 SOL long entered at 150 USDT. At a mark price of 140, the open loss is 1,000, leaving equity of 250. For this exercise alone, maintenance is a flat 2% of current position value: 280. The account is below that requirement.

Assume an engine closes 40 SOL at 139.90 and charges 0.05% of that fill’s value. These are teaching inputs, not SOL parameters quoted from an exchange. The remaining 60 SOL still uses the original 150 entry for this simple accounting example. Mark stays at 140 throughout, and all remaining wallet equity supports the position.

In the original 139.90 fill case, the closed portion realizes a loss of 404 USDT: 40 × (139.90 − 150). Its fee is 2.798. Wallet balance becomes 843.202. The remaining 60 SOL carries an unrealized loss of 600, so total equity is 243.202, displayed as 243.20. The account did not receive 5,596 USDT of spendable cash just because that was the closed trade’s value.

Maintenance, however, falls to 168: 60 × 140 × 2%. Equity is now 75.202 above that requirement. That is how a forced reduction can restore the modeled maintenance test while leaving the trader poorer. The requirement fell by more than the account’s equity did. No loss was erased and no insurance payout appeared.

A worse fill can defeat the same size reduction

Change only the execution price to 137. The extra loss against the unchanged 140 mark is 120, and the modeled fee is 2.74. Equity falls from 250 to 127.26. Maintenance is still 168 because the remaining size and mark have not changed. Closing exactly the same 40 SOL now fails to restore the account. The engine would need whatever further action its rules prescribe.

Bybit isolated margin: the current tier changes the sequence

Bybit’s UTA isolated-margin rules first remove orders that would increase the position. Above the lowest risk tier, an IOC reduction can target the difference to a lower tier. At the lowest tier, the documented sequence instead moves from cancellations to closing the position if maintenance is still insufficient. Partial liquidation is therefore not a promised intermediate step for every isolated trade.

A position already in the smallest bracket may go directly to full closure rather than receive another tier reduction. For larger positions, order cancellation frees reservations; an executed reduction changes the held quantity.

Kraken Multi-M: reductions are attempted within a defined margin band

Kraken’s Multi-M Equity Protection Process describes 10% reductions while equity is below maintenance but above its liquidation-margin threshold. Its partial-liquidation charge depends on the fill relative to the zero-equity price, with a mark-price cap. The document separates this from full liquidation and explicitly excludes Kraken Derivatives US. Coin-M uses a different sequence.

This is why “partial liquidation is cheaper because it closes less” is not a sound comparison by itself. A percentage trading fee in a worked example and a liquidation charge calculated from a price difference are different costs. Applying an ordinary taker rate to every forced reduction can substantially misread the final balance.

Hyperliquid: a 20% first order has an important exception

Hyperliquid ordinarily sends a full-size liquidation order to its order book, which can fill partially. For liquidatable positions larger than 100,000 USDC, the documented initial market order is only 20%. After a partial liquidation, a 30-second user cooldown applies during which subsequent market liquidation orders are for the entire position. That cooldown is not a grace period.

The protocol also describes backstop liquidation below two-thirds of maintenance if order-book liquidation has not succeeded. Cross backstop takes the cross positions and cross margin; isolated backstop concerns that position and its margin. These are separate from a successful book reduction that leaves a viable remainder. “No clearance fee” in the documentation should not be read as a promise that liquidation preserves the maintenance buffer.

The event history and account ledger answer different questions. Executions show which quantity closed and at what price. The ledger shows realized P&L, charges and transfers. A single negative change in wallet balance may include more than the forced trade. Funding or collateral conversion can land near the same timestamp, so comparing two screenshots of balance alone is not enough to attribute the difference.

If the wallet balance falls by 404 and the open loss improves by 400, the economic loss is not 804. In the SOL example, most of that change simply moves loss from the open position into realized accounting. The additional four USDT comes from executing below mark; the fee is separate. This reconciliation is often more revealing than a platform’s percentage-return display.

An account may also show more “available” margin after cancellations despite unchanged equity. Available balance measures what can be used for another action after reservations and requirements. Equity measures the marked value of the account. Neither is a promise that a withdrawal will be approved while liquidation restrictions remain active.

Do not assume a favorable liquidation execution is always returned to the same trader in the same way. Kraken’s published Coin-M process describes retention of residual margin, while other takeover arrangements route specified residual amounts or penalties elsewhere. The relevant question is the account’s actual liquidation treatment, not whether the market subsequently bounced.

A stop designed for the original position may no longer match the account. Suppose 100 SOL was protected by a 100 SOL sell instruction and only 60 remains. Whether that instruction is canceled, reduced or still active depends on the order type and platform. The size printed on an old order ticket cannot be treated as the size currently protected.

Bybit reduce-only limit orders can adjust to the remaining position and cannot increase exposure. Check conditional stops separately after liquidation because their survival and resizing follow the platform’s own rules.

Review the exit set as a group

Check which stop and profit orders remain active, whether they refer to the correct long or short leg, and their combined permitted closing quantity. Two independent orders can each look reasonable while collectively targeting more than the remaining exposure. Native position-linked exits may handle this automatically; separate orders created by an API or external service may require different handling.

An ordinary sell order without an exposure-reducing constraint can potentially become a new short after the long disappears. Conversely, an order that correctly refuses to increase exposure can be canceled or rejected once there is nothing left to close. A missing order in that situation is not necessarily an execution failure; it may be the constraint working as intended.

Wait for the position and order records to settle before submitting a replacement based on a stale quantity. “Close 60” is wrong if another forced fill has already reduced the remainder to 30. During a fast event, order acknowledgments, fills and the account screen may update at different times. The exchange’s latest accepted state—not the size at the first alert—is the practical reference.

A completed reduction proves only that the engine reached its stopping condition at that moment. The remaining contracts continue to respond to price. In our 60 SOL example, another one USDT fall changes position P&L by 60 USDT, before costs and the smaller associated change in maintenance. A 75.20 cushion is not a large amount of room simply because the original position has shrunk by 40%.

With the same simplified assumptions, a mark of 139 would leave equity of 183.202 and maintenance of 166.80. At 138, equity becomes 123.202 against maintenance of 165.60. That second price is below the modeled requirement. The account can re-enter distress without reopening a single contract or increasing leverage.

Cross collateral adds another source of movement: a different position can lose value while this contract’s price stays still. Crypto used as collateral can also decline in its accepted margin value. These are reasons to inspect account equity after a partial liquidation rather than treating the surviving contract’s chart as a complete picture.

Adding funds is a separate action with separate timing. Money on another exchange or waiting for a blockchain confirmation does not yet support the distressed position. Even a transfer within a platform needs to reach the correct margin account. Once the engine controls the position, the available actions and cancellation rules may be restricted. No transfer button establishes a guaranteed interruption of the process.

In the SOL example, the trade survives at 60 SOL with about 243.20 USDT equity. Reopening the 40 SOL just removed would raise maintenance again without restoring the money lost. Size a new decision from the surviving equity.

• Compare the remaining SOL quantity with the quantity in each protective order.
• Separate realized loss and liquidation charges from collateral still supporting the trade.
• Recalculate maintenance at the surviving tier before adding exposure.