Panana implements an industry-standard risk management process, i.e. ‘liquidation’, to help protect both the traders and the market makers, and ensure fairness for both parties.

Whether an account will be liquidated is determined by the ‘margin level’ of the account. While the ‘margin level’ decreases and reaches less than 10%, the liquidation process will be triggered. The following formula calculates the margin level.

Margin Level = (Balance + Unrealized_PnL - Rollover_fee - Position_fee) / Used_Margin

While an account matches the liquidation condition, and has more than one opening position, the liquidation process follows the ‘most losses, first been liquidated’ principle. That said, the position with the largest value losses will be liquidated at the beginning. After the first liquidation transaction has been executed, the margin level will be recounted. If the number equals, or more than 10%, the whole liquidation process will end. Otherwise, the process will continue, until the margin level rises above the threshold.

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