Liquidations
Liquidation occurs when your account equity is no longer sufficient to support your open futures positions. Kraken Derivatives US monitors your portfolio in real time to help prevent your account from entering a negative balance. When equity gets too low, liquidation may be triggered automatically.
If your margin level drops below acceptable thresholds, Kraken Derivatives US will initiate a liquidation to reduce risk and prevent your account from going into debit.
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Some or all open positions will be closed immediately
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You will receive an email confirming the liquidation event
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You may be set to initial trading margin limits only
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A liquidation fee will be applied to your account
Liquidation Fees:
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First liquidation event: $25
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Subsequent events: $50 per event
Liquidation risk varies depending on when and how you're trading:
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During the day: If you're using intraday margin, you can take on more leverage, but sharp negative price moves can rapidly reduce your equity and increase your liquidation risk.
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Near session close: All positions must meet initial margin requirements starting 15 minutes before the market closes (3:45 p.m. CT). If your margin level exceeds 100% of initial margin at that time, liquidation is highly likely.
Note: Being over 100% of intraday margin during the day does not necessarily trigger liquidation. But being over 100% of initial margin heading into the end of day will likely trigger liquidations.
Your Portfolio tab provides multiple tools to monitor your risk status:
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Intraday and Initial Margin Sliders: Show what percentage of your margin usage you're currently at. These shift from green to red as your risk increases.
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Estimated Liquidation Value: Displays how much your account could lose before a liquidation event may be triggered, based on your current exposure.
These tools update in real time as market prices change and are your best indicators of proximity to a liquidation.
Here are best practices to reduce the risk of liquidation:
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Use the Margin Validation Toggle: Turn off the "Validate order size using intraday margin" toggle if you want to restrict new trades to only those that respect initial margin levels. This helps avoid entering new positions that could breach overnight thresholds.
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The Margin Validation toggle prevents new positions from being opened, but does not prevent existing positions from incurring losses that would otherwise increase margin usage. This means it's possible to cross liquidation thresholds due to market movement—even if no new positions are added.
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Switching your margin validation toggle from intraday to initial margin does not automatically adjust or close existing positions. You may still be at risk if your current positions exceed initial margin thresholds.
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Close or Adjust Positions Before Market Close: If your margin level is high approaching the session close, consider reducing exposure to avoid liquidation under initial margin rules.
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Actively Monitor Your Account: Margin percentages and liquidation thresholds can change rapidly based on price movement. Even if a position was compliant earlier in the day, losses can push your equity into risky territory.
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Understand Margin Behavior: Switching your margin validation toggle from intraday to initial does not close existing positions—you must actively manage risk after toggling.
These tools update in real time as market prices change and are your best indicators of proximity to a liquidation.
Brokerage services are provided by NinjaTrader Clearing, LLC doing business as Kraken Derivatives US, a Futures Commission Merchant registered with the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association (NFA ID #0309379).