Wrongful futures liquidations on Kraken
Wrongful futures liquidations on Kraken
I had the misfortune to have a large position liquidated in BTC/USD multi-collateral futures on Kraken. The markets (looking also at other relevant term, spot and perpetual markets) were very quiet, and I found out that the reason was a volatile behavior of Kraken’s mark price. The mark price follows the midpoint of the bid/ask spread. At some point the market makers stopped quoting, the bid/ask spread became almost 30% wide and the mark price plunged by more than 10% in two minutes causing my liquidation.
I wonder if people had similar experiences on Kraken. While it is not a pleasant subject to discuss for anyone affected, if enough people come together, we may be able to exert some pressure on Kraken to compensate losses and improve their mark price methodology.
This can indeed easily liquidate your position in futures. If you are not ready for such situation, better put money in futures that you feel you are ready to lose. As it can happen in any exchange, you need to look out for your funds. If you try to file a complaint, I don’t think it will go anywhere. Better get out of futures and maybe, just look for opportunities in spot trading. The exchange for sure have their answers ready for this kind of complaint. And most of the time, the complaint will not go anywhere. You will find out that you are just wasting your time on this type of complaint. Such scenarios are common in futures. Better be careful in dealing with this type of trading. As I said, many are getting liquidated in their position.
This was common on exchanges before. I have seen it on Binance and many other exchanges before. Some exchanges may even compensate the losers but there are many cases there would be no compensation.
This is one of the reasons high leverage is not good. The price will later get back to normal after some seconds or minutes.