1. When May My Account Be Subject to Force Liquidation?
Scenario 1: The Account Remains in Dangerous Status for More Than 48 Hours
When your account equity falls below the Maintenance Margin Requirement ("MM"), your account will enter Dangerous Status, and a Margin Call will be generated.
If your account remains in Dangerous Status for more than 48 hours, it may become subject to partial or full force liquidation.
Important Notice：The 48-hour Margin Call period is based on the time funds are actually credited to your securities account, rather than the time the transfer is initiated.
For wire transfer clients, fund arrival times may be affected by bank processing times, public holidays, and international settlement arrangements. Please allow sufficient time for funds to arrive and avoid initiating transfers close to the Margin Call deadline.
Scenario 2: Account Equity Falls Below the Force Liquidation Margin Requirement
The Force Liquidation Margin ("FM") represents the minimum equity required to maintain the positions held in your account.
The system calculates the account-level FM based on the Force Liquidation Margin Rate assigned to each security in the portfolio.
Account Force Liquidation Margin = Σ (Market Value × Security Force Liquidation Margin Rate)
For securities that are not margin eligible, Force Liquidation Margin Rate = 100%
Assume your account holds the following positions:
Security | Market Value | Force Liquidation Margin Rate |
AAPL | USD 100,000 | 30% |
XYZ (Non-Marginable) | USD 20,000 | 100% |
The account Force Liquidation Margin is therefore:
100,000 × 30% + 20,000 × 100% = USD 50,000
If your account equity falls below USD 50,000, your account may become subject to force liquidation.
Scenario 3: Your expiring option, if exercised or assigned, may cause your account equity to fall below the Maintenance Margin Requirement or Forced Liquidation Margin Requirement, or may result in a short stock position that is not supported.
An expiring option is an option contract that expires on the current trading day. To reduce the risk of failed exercise, BIT will periodically assess, prior to market close on the expiration date, the margin required and, where applicable, the number of underlying shares required for the exercise and settlement of options that are in the money (ITM) or near the money, and may increase the applicable margin requirement for such options accordingly.
If your account does not have sufficient margin, or if you do not hold sufficient non-shortable underlying shares to support the exercise of a put option, we may liquidate your option position on the expiration date at our discretion.
Examples
Long Put or Short Call
If the underlying stock is not eligible for short selling (stock borrowing), you must hold sufficient underlying shares to support exercise. Otherwise, your option position may be force-liquidated.
If the underlying stock is eligible for short selling (stock borrowing), an in-the-money option will generally be exercised automatically if your account has sufficient margin and you have not closed the position before expiration. However, if your account does not have sufficient funds, your option position may be force-liquidated.
Long Call or Short Put
If the option expires in the money and your account has sufficient margin, the option will generally be exercised automatically if you do not close the position before expiration. However, if your account does not have sufficient funds, your option position may be force-liquidated.
Please note: During the liquidation process, if we are unable to liquidate the option position in a timely manner due to market liquidity constraints, we may allow the option to lapse instead of exercising it, even if the option is in the money (ITM). In such cases, the option will expire without being exercised.If, for any reason, we are unable to liquidate the option position or allow it to lapse, and the option is inadvertently exercised, resulting in a stock position, BIT reserves the right to liquidate the resulting stock position at any time.
2. If Equity Recovers Above the Maintenance Margin Requirement, Is the Risk Fully Resolved?
Whether the risk has been resolved depends on whether your account has exited Dangerous Status.
When an account enters Dangerous Status, the system calculates a Margin Call Amount. This amount is not simply the amount required to bring your equity back above the Maintenance Margin Requirement. It also includes an additional risk buffer designed to reduce the likelihood of repeated Margin Calls caused by normal market fluctuations.
Therefore, after depositing additional funds or reducing positions, you should refer to the latest Margin Call Amount and Margin Level displayed in the App.
Your account is considered to have resolved the risk only after it has exited Dangerous Status.
3. Margin Level Definitions
Margin Level | Description |
Safe | No financing is currently being used. |
Medium | Financing is being used and account equity is above the Initial Margin Requirement. |
Warning | Account equity is below the Initial Margin Requirement but above the Maintenance Margin Requirement. |
Dangerous | Account equity is less than or equal to the Maintenance Margin Requirement, or there is an outstanding Margin Call requirement that has not yet been satisfied. |