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

# Understanding your Margin Ratio and Liquidation Price

> Learn how your margin ratio and liquidation price work on Roxom and how to reduce your risk of liquidation.

Your Margin Ratio and Liquidation Price are key to knowing how close you are to losing your position. If your Margin Ratio reaches 100%, your position will be liquidated.

***

## What is the Margin Ratio?

The **Margin Ratio** shows how much of your available margin is being used to keep your position open.

It's calculated from:

* Your **Equity** in the position
* The **Maintenance Margin** required

**Formula:**

```
Margin Ratio = (Maintenance Margin ÷ Equity) × 100
```

<Info>
  **See the exact calculation** in the [Margin & Risk](https://docs.roxom.com/rulebook/margin-rules/initial-and-maintenance-margin) section of our Rulebook.
</Info>

***

## Margin ratio levels to watch

| Margin Ratio  | Status       | Action                  |
| :------------ | :----------- | :---------------------- |
| **Below 80%** | Safe zone    | Monitor regularly       |
| **80% - 99%** | Warning zone | Consider reducing risk  |
| **100%**      | Liquidation  | Position will be closed |

***

## What is the Liquidation Price?

The **Liquidation Price** is the Mark Price level at which your margin ratio will hit 100%, causing liquidation.

It's determined by:

* Your entry price
* Position size
* Leverage
* Remaining collateral
* Funding payments (if any)

<Info>
  **See how liquidation price is calculated** in the [Liquidation Mechanics](https://docs.roxom.com/rulebook/liquidation-mechanics/liquidation-triggers-and-overview) section of our Rulebook.
</Info>

***

## Example

**Position details:**

* Position: Long 1 BTC GOLD/BTC at 0.0300 BTC
* Leverage: 10x
* Initial Margin: 0.1 BTC
* Maintenance Margin: 0.025 BTC

If the Mark Price drops enough for your equity to fall to 0.025 BTC, your margin ratio hits 100% and liquidation is triggered.

***

## How to lower your margin ratio

* **Reduce position size**: Close part of your position to free up margin
* **Lower your leverage**: Reduce leverage to decrease margin requirements
* **Use TP/SL**: Set a stop loss directly on your position before your margin ratio reaches dangerous levels

<Info>
  **Learn how to set stop loss on your positions** in [How to set take profit and stop loss](/help-center/roxom-derivatives/how-to-set-take-profit-and-stop-loss).
</Info>

***

## Key takeaways

<Note>
  **Important reminders:**

  * Watch your Margin Ratio in the **Open Positions** panel
  * Remember that liquidation is based on **Mark Price**, not the last traded price
  * Don't wait for the 80% warning. Act early to manage risk
</Note>

***

<Warning>
  This content is for informational purposes only and does not constitute investment advice. Trading digital assets involves significant risk, including the potential loss of your entire investment. Please review our [Risk Notice](/legal/risk-notice) before trading.
</Warning>

***

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