Wrongful futures liquidations on Kraken

[termtrader]

On May 1st I had the misfortune to have a large position liquidated in September 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.

[Oshosondy]

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.


See the one that I saw recently, but it is about Paxos Gold in derivative market on Bybit



Paxos Gold price has not been up to $2550 before but it went up within some minutes to over $3440 on Bybit derivative market few weeks ago.

I see this often on all the exchanges that I am using.

[AmoreJaz]

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.

See the one that I saw recently, but it is about Paxos Gold in derivative market on Bybit
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Paxos Gold price has not been up to $2550 before but it went up within some minutes to over $3440 on Bybit derivative market few weeks ago.

I see this often on all the exchanges that I am using.

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.

[Oshosondy]

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.

The traders that uses low leverage will not be affected because the price will go back to normal in few seconds or some minutes. But it can be disturbing for scalpers and those traders that are using high leverage. Generally high leverage is not even good.

[logfiles]

Happened to me on bybit some years ago, My entire position got liquidated within seconds because bybit's mark price was way off the spot index price at that time. During those days, bybit was just still under constant development. I wrote to the team about the issue and got compensated. They also improved on how the liquidation engine works plus the calculations for their Mark Price.