Generally, this situation occurs when the stop-loss trigger price is close to the liquidation price. When the market experiences significant volatility, the price may directly hit the liquidation price, preventing the stop-loss from being executed in time. Alternatively, if the trigger price for stop-loss or take-profit is set the same as the order price, market fluctuations may cause the stop-loss to fail to execute in time, leading to further losses and eventually triggering liquidation.
Example Explanation:
In the BTCUSDT perpetual contract, a long position sets a stop-loss trigger price at 106,530 USDT.
However, due to a sharp market drop, the price quickly hits 106,526 USDT, which directly triggers forced liquidation.
Since the stop-loss order was not yet placed or executed, the system cancels the stop-loss and proceeds with forced liquidation, resulting in a passive closeout of the position.
Risk Disclaimer:
This content is for reference only and does not constitute an invitation, offer, solicitation, or recommendation to trade any products, nor does it constitute investment advice. Investment involves risk, and digital asset prices are subject to significant market risk and volatility, especially in contracts and options, which are more susceptible to market risk and price fluctuations. This could result in the loss of the entire investment amount. Therefore, digital asset trading may not be suitable for all investors. Investors should understand the product's operation model and make informed and rational investment decisions. Please ensure compliance with local laws and regulations.