> For the complete documentation index, see [llms.txt](https://docs.moonlander.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.moonlander.trade/how-to-use/trading/liquidation.md).

# Liquidation

## :clock1: When will liquidation be triggered?

* Market price hitting the liquidation price
* Having insufficient collateral to cover fees

## :abacus: How is Liquidation Price calculated?

{% tabs %}
{% tab title="Long Position" %}
Liquidation Price = Entry Price - (Collateral \* Liquidation Lost Rate - Fees) / Position Size in Quantity
{% endtab %}

{% tab title="Short Position" %}
Liquidation Price = Entry Price + (Collateral \* Liquidation Lost Rate - Fees) / Position Size in Quantity
{% endtab %}
{% endtabs %}

* Fees include: Close Fee, Holding Fee and Funding Fee
* Liquidation Loss Rate = 85%
* Position Size in Quantity = Initial Collateral \* Leverage / Entry Price

{% hint style="info" %}
When the position loses >= 85% of its value, it will be liquidated.
{% endhint %}

## :moneybag: What happens to the remaining collateral?

Liquidated positions are covered by MLP. Any remaining collateral will be transferred to MLP upon liquidation so there is no refund. This applies to both regular mode and degen mode at 500, 750, 1000x