Liquidation Price Calculator

Frequently Asked Questions

How is liquidation price calculated for a long?

Approx: liq ≈ entry × (1 − 1/leverage + maintenance margin). For a 10× long entered at $50,000 with 0.5% MM: 50,000 × (1 − 0.10 + 0.005) = $45,250.

And for a short?

Approx: liq ≈ entry × (1 + 1/leverage − maintenance margin). For a 10× short entered at $50,000 with 0.5% MM: 50,000 × (1 + 0.10 − 0.005) = $54,750.

How does leverage change the liquidation buffer?

Roughly, % move to liquidation ≈ 1/leverage. A 5× position liquidates near a 20% adverse move, 10× near 10%, 20× near 5%, 100× near 1%. Funding payments and fees erode the buffer over time.

Why does my actual liq differ from the formula?

Exchanges include funding accrual, unrealized PnL on other positions (cross-margin), insurance-fund buffers, and tiered maintenance margins for larger sizes. Treat the formula as a planning estimate; rely on the exchange's live liq price for trading.

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Estimates for informational purposes only.

Important Disclaimer: Estimates for informational purposes only.

This calculator provides estimates for informational purposes only. Results are based on assumptions and may not reflect actual outcomes. Consult qualified professionals in relevant fields before making important decisions based on these results.

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How This Calculator Works

Leveraged crypto trading borrows from the exchange to amplify exposure: a 10× long on $1,000 of margin controls $10,000 of notional. Profits and losses scale with that notional, and once unrealized loss eats through your margin to the maintenance margin threshold, the exchange force-closes the position to protect itself. This tool computes that liquidation price for both longs and shorts, the distance from your entry, the initial margin posted, and an approximate PnL at the current mark price. It applies to isolated-margin futures and perpetuals on Binance, Bybit, dYdX, and similar venues.

Formula / Method

For an isolated long: Liq = entry × (1 − 1÷L + MM). For a short: Liq = entry × (1 + 1÷L − MM). Here L is leverage and MM the maintenance margin rate (often 0.4–1% for majors, more for altcoins). Initial margin = position size ÷ leverage. This is the simplified formula; real exchanges add a tiered maintenance schedule for very large positions, funding fees, and an insurance-fund surcharge that nudges the actual liquidation a touch tighter than the formula predicts.

Worked Example

Long BTC at $50,000 with 10× leverage and 0.5% maintenance margin: Liq = 50,000 × (1 − 0.1 + 0.005) = $45,250. So BTC only has to fall 9.5% from $50k before you are wiped out. Switch to a short at 10×: Liq = 50,000 × (1 + 0.1 − 0.005) = $54,750, a 9.5% rise. Drop leverage to 5× and the long liquidation moves to $40,250 - a 19.5% buffer for half the upside. This is why experienced traders rarely run leverage above 3–5× on volatile assets.

Common Mistakes

Using cross margin without realizing the entire account secures the position - one bad trade can liquidate everything.

Forgetting funding fees in perpetual swaps; positive funding on a long bleeds margin every 8 hours.

Treating leverage as "buying power" when it is really a loss-amplification multiplier.

Ignoring slippage: a fast cascade can fill liquidations well below the theoretical price.

Not accounting for tiered maintenance margins on large positions, which raise MM and pull liquidation closer.

Tips & FAQ

The single most effective risk control is lower leverage. A 2× position survives a 45%+ drawdown; a 25× position dies on a routine 3% wick. Always pair a leveraged trade with a stop-loss placed comfortably before the liquidation price, since the stop fills at market while liquidation incurs additional fees and worse fills. Track maintenance margin tiers on your venue - once a position grows large, MM steps up, and the liquidation price you saw at entry will have crept toward your mark. This is an educational estimate, not financial advice; leveraged crypto is among the highest-loss-rate retail products and most retail traders lose money.

Liquidation Price Calculator

Frequently Asked Questions

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