Liquidation: The Built-In Guardrail for Confident Trading

Leverage is a powerful tool, but it requires a safety net. At Invo, we believe transparency is the ultimate form of risk management. That’s why we’ve built a liquidation system designed to protect your capital — not just close your trades.

What is Liquidation, Really?

Think of liquidation as a built-in safety system.

Without it, a volatile market move could drain your entire account balance. For example, if you have $1,000 in your account and allocate $100 to a trade, a large move against you could put your full $1,000 at risk.

Liquidation exists to prevent that.

It ensures your loss is capped at what you put into the trade — in this case, $100. It’s the stop-loss you didn’t have to set — a guardrail that steps in to prevent a single bad trade from becoming a total portfolio loss.

What is a Liquidation Event?

A liquidation event occurs when a trader's positions move against them to the point where the account equity falls below the maintenance margin.

The maintenance margin is half of the initial margin at max leverage, which varies from 3-40x. In other words, the maintenance margin is between 1.25% (for 40x max leverage assets) and 16.7% (for 3x max leverage assets) depending on the asset.

The Invo Advantage: Radical Transparency

Most platforms hide your risk behind complex calculations. On Invo, we make it clear.

Inside every trade, you’ll see a Liquidation Bar that shows the exact price where your trade will be automatically closed. This gives you full visibility into your risk at all times.

Dynamic Safety:

Your liquidation price is not fixed — it updates in real time as the market moves. Large or fast price swings can push your liquidation level closer or further away depending on how your trade is affected.

As your trade approaches liquidation, a portion of your trade may also be reduced early to help protect your capital and avoid a full liquidation.

The Liquidation Process

When the account equity drops below maintenance margin, the positions are first attempted to be entirely closed by sending market orders to the book. The orders are for the full size of the position, and may be fully or partially closed. If the positions are entirely or partially closed such that the maintenance margin requirements are met, any remaining collateral remains with the trader.

If the account equity drops below 2/3 of the maintenance margin without successful liquidation through the book, a backstop liquidation happens through the liquidator vault. See Liquidator Vault explanation below for more details.

Isolated Position Protection

When an isolated position is backstop liquidated, that isolated position and isolated margin are transferred to the liquidator. The user's other positions are untouched.

How to Give Your Trade “Room to Breathe”

You are always in control of your risk. If the market moves against you, you have options:

Adding Margin:

Adding funds to a trade that is already in the red pushes your liquidation price further away, giving your trade more room to withstand volatility and recover.

User Protection Over Fees

Traditional exchanges often treat liquidation as a profit center, charging heavy clearance fees.

At Invo, our priority is capital retention.

Our system is designed to protect the user first — ensuring that even when a trade doesn’t go your way, you preserve as much capital as possible and can keep trading.