> For the complete documentation index, see [llms.txt](https://docs.avantisfi.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.avantisfi.com/trading/liquidations.md).

# Liquidations

**Maintenance Collateral**

Maintenance collateral is the minimum collateral required to keep the position open and not liquidated. The position will be liquidated if its collateral falls below the required maintenance collateral.

Collateral health ratio is used to determine the maintenance collateral. For any given position, the collateral health ratio is determined as:

* Collateral Health Ratio = (Net Collateral + PnL + accumulated net funding - closing fee) / Net Collateral, where
  * *Net Collateral= Original Collateral - Opening Fee*
* Liquidations happen when collateral health ratio falls to 85% or lower.

Note - Traders can add collateral to their position to decrease leverage hence increasing distance to the liquidation.

**Risk management**

You can always add (or remove) collateral from an existing position, to increase or decrease your effective leverage, and manage liquidation risk dynamically. 

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