Liquidation price calculator

How the liquidation price is estimated

On isolated margin, each coin in the position is backed by entry ÷ leverage of margin. The exchange closes the position when losses have reduced that margin to the maintenance margin, which is the maintenance rate times the position’s value at that price. Solved for the price:

The coin and the position size drop out of the formula; only the leverage and the maintenance margin rate (MMR) set the distance. At a 0.5% rate, 10x leaves about 9.5% between entry and liquidation, 20x about 4.5% and 50x about 1.5%. When 1/leverage is at or below the rate, the margin is used up the moment the trade opens, and the calculator says so instead of printing a price.

The result is an estimate. Four things move the real figure:

• Mark price. Exchanges trigger liquidation on the mark price, which follows an index of spot prices and can differ from the last traded price during a spike.
• Tiers. The rate rises with position size, so a large position sits closer to liquidation than the first-tier rate suggests. Tier tables also subtract a maintenance amount, which puts the exchange’s price a little farther from the entry than this estimate at the same rate.
• Fees. Some exchanges reserve the estimated closing fee from the margin, which brings liquidation slightly closer.
• Cross margin. With cross margin the free balance of the whole account stands behind the position, so the real price is farther away and moves as the balance changes.

A worked example

Illustrative numbers only

A SOL short at 150 with 20x leverage and a 0.5% maintenance rate:

• Liquidation150 × (1 + 0.05) ÷ (1 + 0.005) ≈ 156.72
• Distanceabout 6.72 above the entry, 4.48%
• Same trade as a long150 × (1 − 0.05) ÷ (1 − 0.005) ≈ 143.22

Now add the stop. The short is wrong if price closes above the swing high at 153.60, so the stop goes at 154. At 20x, liquidation sits 2.72 past the stop. At 30x the gap shrinks to 0.23, with liquidation at 154.23, and from about 31.4x up the liquidation estimate falls below 154, so a spike that reaches the stop liquidates the position before the stop order can fill. Enter your own stop in the stop field and the calculator shows this leverage for your trade.

Common mistakes

• Treating liquidation as the stop. If liquidation is your exit, a losing trade costs most of the margin at a price you didn’t pick. Size from the stop with the position size calculator and set leverage so liquidation sits well past it.
• Topping up margin to keep a trade alive. Adding margin pushes liquidation away and raises what the trade can lose. If price has already closed through the invalidation level, close the trade instead of adding margin.
• Assuming every coin works like BTC. Smaller pairs often start at a higher maintenance rate and a lower maximum leverage, which shortens the distance at the same leverage. Check the tier table for the pair you trade.
• Watching the last price. During a wick the last price and the mark price can split. The liquidation line follows the mark price, so a candle that never touched your number can still close the position.