The 0.1% Liquidation Penalty: What Forced Closes Actually Cost

Every prop firm liquidation penalty looks small on the fee schedule and large on the statement. MyFundedPerps charges a 0.1% liquidation penalty, added on top of the taker fee, when a position is liquidated. That single line from the FAQ fee table understates what a forced close actually costs, because the penalty arrives stacked on commissions, slippage, and whatever drawdown headroom the trade already consumed. This article prices the whole event, in dollars, so you can decide how far liquidation should sit from your entry (hint: further than it probably does).

The prop firm liquidation penalty itself

From the platform's published fee schedule:

Two properties of the penalty deserve attention. It is charged on the position, which means it scales with notional, not with your margin. And it is additive: the liquidation exit fill also pays the normal taker commission. On a crypto position, the forced exit therefore costs 0.03% plus 0.1%, or 0.13% of notional, before slippage.

The full cost of one liquidation

Take a $200,000 crypto notional position that gets liquidated:

Now add the implicit costs:

• Slippage. A liquidation is a forced market exit, and market fills take slippage against the order up to the tiered cap for the instrument and size.
• Swap fees already paid. Both longs and shorts pay hourly swap debits on notional at each UTC hour boundary. A $200,000 crypto position held for three days has already paid about $180 in holding costs.
• The unrealized loss itself. By the time liquidation triggers, the position's losses have already hit equity, and MyFundedPerps loss rules measure equity including open P/L.

That last point is the one traders miss. On this platform, liquidation is usually not the event that ends an account; the loss floors get there first, or the liquidation's damage finishes the job.

Why the account floor usually breaches first

MyFundedPerps evaluations carry a 3% daily loss limit and a static max drawdown of 3% (Select), 5% (Prime), or 6% (Signature), all on starting balance, all measured on equity. A liquidation only happens when a position's own margin can no longer support it, and with cross margin the whole balance backs the trade. Consider a $100K Prime account running one $500,000 notional crypto position on cross margin:

• A 1% adverse move is a $5,000 equity hit. That is the entire 5% max drawdown allowance and more than the $3,000 daily allowance. The account breaches before any liquidation engine needs to act.
• Even at $200,000 notional, a 1.5% adverse move is $3,000, the full daily allowance.

In other words, at leverage levels where liquidation is a realistic near-term risk, the rule floors are the tighter constraint. Liquidation becomes the binding risk mainly on isolated margin positions, where the loss is capped at the assigned bucket but the 0.1% penalty still applies to the forced close. Either way, max drawdown and daily loss limits are measured on account equity: liquidation is not the only limit, and the floor still applies.

The penalty's real job: headroom theft

The docs note that commissions reduce account balance and therefore loss-rule headroom. The liquidation penalty does the same thing, harder, at the worst possible moment. After a liquidation:

• Equity is down by the trading loss plus 0.13% of notional in fees plus accumulated swap debits.
• The daily loss floor does not move until midnight New York time, so the rest of the day must be traded with whatever headroom remains.
• The static max loss floor never moves at all (until the first funded withdrawal locks it to the starting balance, permanently).

A $260 fee event on a $100K Select account consumes nearly a tenth of the $3,000 daily allowance by itself. Chain one liquidation with the losing trade that caused it and a normal trading day can become a failed day without any single dramatic mistake.

How to make the penalty irrelevant

The clean way to treat the 0.1% penalty is as a fee you never pay.

1. Size from the loss floors, not from the liquidation price. If a full stop-out fits inside your remaining daily allowance with margin to spare, liquidation stays a distant technicality.
2. Use isolated margin deliberately when you want a hard per-position loss cap, and price the 0.1% penalty into that cap.
3. Respect the swap clock. Hourly debits on both longs and shorts erode equity and move liquidation closer on margined positions.
4. Never average down into a position that is approaching either a floor or a liquidation level. Adding raises notional, which raises the penalty, the swap debits, and the equity damage per point.

For the complete cost model, see myfundedperps-fees-breakdown; for the floors, myfundedperps-static-drawdown and myfundedperps-rules-explained.

Frequently asked questions

What is the MyFundedPerps liquidation penalty?

A 0.1% charge added on top of the taker fee when a position is liquidated, per the published fee schedule. On crypto, the forced exit therefore costs 0.03% taker commission plus 0.1% penalty, charged on the position's notional.

Is the penalty charged on my margin or my position size?

On the position. Fees at MyFundedPerps are computed on filled quantity times execution price, so leverage does not reduce them. A $200,000 liquidated position pays $200 in penalty regardless of the margin posted.

Does liquidation fail my evaluation?

Not by itself. What fails the account is breaching the daily loss limit or the max loss floor, both measured on equity including open P/L. A liquidation's losses and fees count toward those limits like any other debit, and they can be the event that pushes equity through a floor.

Do I still pay swap fees on a position that gets liquidated?

You pay the hourly swap charges that accrued while the position was open, sized by the notional held at each UTC hour boundary. A position closed (or liquidated) before a boundary does not pay that hour's charge.

Is cross or isolated margin better for avoiding the penalty?

Neither avoids it; both pay 0.1% on a liquidation. Isolated caps the position's loss at its assigned margin bucket, which can contain the damage. Cross keeps liquidation further away but lets a bad trade drain more of the balance. In both modes, account-level loss floors still measure total equity.