> ## Documentation Index
> Fetch the complete documentation index at: https://docs.everstrike.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Liquidation: Incremental Position Reduction on Everstrike

> Everstrike liquidates positions incrementally. Learn when it starts, how each order is sized, how to add margin to stop it, and what happens on failure.

When a position's margin falls below the minimum maintenance requirement, Everstrike begins liquidating it incrementally — reducing the position in steps rather than closing it all at once. This approach gives the market time to absorb the selling pressure and gives you a window to add margin and halt the process. Liquidation stops as soon as your margin meets the maintenance requirement again.

Read [Margin Requirements](/trading/margin-requirements) for the applicable minimum margins for each contract type.

## When Liquidation Starts

Liquidation starts when **Gross Position Margin falls below the Minimum Maintenance Margin** requirement for a position.

* With **Cross Margin** (the default), the system evaluates your account-wide margin across all positions. A single undercollateralized position can affect the whole account.
* With **Isolated Margin**, the system evaluates each position independently. Only the affected position enters liquidation.

## How Liquidation Works

<Steps>
  <Step title="System takes temporary control">
    Everstrike temporarily assumes control of the position selected for liquidation. You cannot manually submit or cancel orders for that position during this period.
  </Step>

  <Step title="Market conditions are assessed">
    The system evaluates current market depth, the estimated average fill price, and recent trade executions to determine whether an acceptable close-out price is achievable.
  </Step>

  <Step title="IOC order is submitted">
    If conditions support a reasonable close-out, the system submits an Immediate Or Cancel (IOC) order on your behalf.
  </Step>

  <Step title="Position and margin requirement are reduced">
    A filled order reduces the position size. The maintenance margin requirement decreases proportionally.
  </Step>

  <Step title="Control returns when margin is restored">
    Once your margin meets the maintenance requirement, the system returns control of the position to you. If margin is still insufficient, the process repeats from Step 1.
  </Step>
</Steps>

## Liquidation Order Size

Each liquidation order uses the following notional value:

```text theme={null}
Order Notional (USD) = Min(Position Size (USD), Max(0.10 × Position Size (USD), 1,000 USD))
```

Each order is at least 10% of the position's USD notional and at least `1,000 USD` where possible. It never exceeds the remaining position value. This incremental sizing reduces the market impact of forced closes.

## During Liquidation

<Warning>
  While a position is in liquidation, the trading interface shows a warning beside that position. You cannot submit or cancel orders for that position until liquidation ends.
</Warning>

You can still add margin while liquidation is active — doing so may return the position to compliance and halt the process:

* With **Cross Margin** — deposit additional assets into your trading account to increase your account-wide margin.
* With **Isolated Margin** — add margin directly to the affected position by dragging the leverage slider to the left.

Keep the following restrictions in mind during an active liquidation:

* You **cannot increase leverage** on the position while it is being liquidated.
* Once the position exits liquidation and the warning disappears, wait **at least one minute** before submitting new orders for that position.
* All liquidation orders appear in your orders overview in real time so you can track the process.

<Tip>
  Adding margin as soon as you see the liquidation warning is the fastest way to stop the process. On isolated margin, reducing leverage proactively before margin thresholds are reached prevents liquidation from starting at all.
</Tip>

## Liquidation Failure

The system submits a liquidation order only when market depth and estimated fill prices meet its close-out criteria. In conditions of extreme price movement or insufficient liquidity, it may not be possible to close the position through normal liquidation.

If liquidation cannot complete, the position may transfer to a Liquidity Provider. See [Deleverage Events](/trading/deleverage-events) to understand how Everstrike handles the resulting risk in those scenarios.