Contract Liquidation Debt Disposal and Risk Avoidance Guidelines

When the net value of the contract account reaches zero and results in liquidation debt, it is essential to remain calm and follow the procedures below:

Disposal in Three Steps:

1. Fund Isolation

• Immediately stop transferring funds to the contract account (this will trigger automatic deductions for debt repayment).

• The platform will not transfer funds from the spot account to offset liquidation debt, but outstanding debts will freeze the withdrawal function of the account.

2. Debt Appeal Process

• Submit a formal ticket to customer service, including:

◦ Historical position records

◦ Order snapshot at the time of liquidation

◦ Details of the liquidation price

• Clearly state the request for debt reduction (some platforms accept small amounts for write-off)

Note: Maintain a professional demeanor during communication and avoid emotional statements. The platform's contract agreement has clearly stated that users bear trading responsibilities; providing effective evidence is more crucial than shifting blame.

3. Continuous Follow-up and Negotiation

• Small debts are usually approved quickly

• Debts over $10,000 require multiple rounds of negotiation

• Keep complete communication records and seek compliance dispute resolution channels if necessary

Core Lesson: Establishing Proactive Risk Control Mechanisms

• ▶ Mandatory Stop-Loss Settings: The stop-loss line should be placed 1%-2% above the liquidation price (to hedge against implicit liquidation costs)

• ▶ Awareness of Liquidation Fees: Liquidation will incur an additional liquidation management fee of 1.5% of the position value (often overlooked implicit cost)

• Case Illustration: A user with a $1,000 account experiences a liquidation of an $800 position, resulting in an actual balance of zero, primarily due to failing to account for liquidation fee consumption of the remaining margin

Institutional User Warning:

High-frequency high-leverage traders and arbitrage strategy implementers face lower tolerance for liquidation debt from the platform and must strictly adhere to:

1. Dynamic Margin Monitoring

2. Multi-Account Risk Isolation

3. Stress Testing Simulations

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