Liquidation Price Calculator
Estimate the liquidation price for a leveraged long or short position, solve for entry price, leverage, or maintenance margin, and see how far a move it takes to get liquidated — with graphs, a position-risk helper, and reference tables.
Leverage — the dominant factor
Higher leverage shrinks the initial margin (1/Lev), pulling the liquidation price sharply closer to entry — the relationship is highly non-linear at high leverage.
Maintenance margin — a smaller buffer eater
A higher MM requirement pushes the liquidation price closer to entry too, since less of the margin is usable before the exchange steps in.
Entry price — scales the result
Liq scales linearly with entry price for a fixed leverage and MM; the percentage distance to liquidation stays the same.
Long vs. short — mirrored direction
A long position is liquidated on the way down; a short position is liquidated on the way up. The formula flips sign accordingly.
Position Risk Helper & Reference Tables
Turn the liquidation price above into position-size dollar figures, and check the sensitivity of leverage across maintenance margin tiers.
Position risk helper (uses the values above)
Liquidation Distance by Leverage
Approximate percentage move needed to reach liquidation, for your current maintenance margin.
| Leverage | Initial margin (1/Lev) | Distance to liquidation | Approx. Liq. price |
|---|
Illustrative Maintenance Margin Tiers
| Notional size tier (example) | Typical max leverage (example) | Example maintenance margin |
|---|---|---|
| Small | Up to 100×–125× | ≈0.4%–0.5% |
| Medium | Up to 50× | ≈0.5%–1% |
| Large | Up to 20× | ≈1%–2.5% |
| Very large | Up to 10× or less | ≈2.5%–10% |
How to Use This Calculator
The liquidation formula links four quantities: entry price, leverage, maintenance margin, and the resulting liquidation price. Pick which one to solve for and fill in the rest.
Pick Long or Short
The sign of the leverage and margin terms flips between a long and a short position.
Choose what to solve for
Pick Liq, Entry, Leverage, or Maintenance Margin — the formula is rearranged automatically.
Enter the known values
Use leverage and margin presets, or type your own figures from your exchange.
Read the distance to liquidation
The result tag shows the percentage move needed to reach liquidation from entry.
Check the graph
See how sharply the safety margin shrinks as leverage rises, for a few maintenance margin levels.
Size your position
Use the position risk helper to see the dollar loss at liquidation for a given notional value.
What This Tool Offers
A quick way to understand how leverage and maintenance margin combine to set a liquidation price.
Solve any variable
Compute liquidation price, entry, leverage, or maintenance margin.
Long and short
Switch between position sides — the formula and chart adjust automatically.
Distance-to-liquidation chart
See how quickly your safety buffer shrinks as leverage increases.
Position risk helper
Turn a notional position size into an estimated dollar loss at liquidation.
Reference tables
Distance to liquidation by leverage, and illustrative maintenance margin tiers.
Sensitivity check
See how a 1% change in an input moves the liquidation price.
What Does This Liquidation Price Formula Estimate?
When a leveraged position is opened, only a fraction of its notional value (the margin) is posted upfront. If the market moves against the position enough that the remaining margin falls to the exchange's maintenance requirement, the position is force-closed — liquidated. This simplified formula estimates that price from entry price, leverage, and maintenance margin.
Short: Liq ≈ Entry × (1 + 1/Leverage − Maintenance Margin)
Rearranged Forms (Long Position)
Lev = 1 / (1 − MM − Liq/Entry)
MM = Liq/Entry − 1 + 1/Lev
Worked Examples
Liq = 50,000 × (1 − 0.10 + 0.005) = 50,000 × 0.905
Liq = 45,250 (≈9.5% below entry)
Liq = 3,000 × (1 + 0.04 − 0.01) = 3,000 × 1.03
Liq = 3,090 (≈3% above entry)
Frequently Asked Questions
It's a simplified estimate for a single isolated position ignoring fees and funding. Real exchange liquidation engines add other adjustments, so treat this as an educational approximation and always verify with your exchange.
Because the initial margin, 1/Leverage, is the buffer that absorbs price moves before the position is forced closed. Higher leverage means a smaller buffer, so a smaller adverse move triggers liquidation.
It's the minimum margin ratio an exchange requires to keep a position open. Once the margin ratio falls to this level, the position is liquidated even though some margin remains.
A long position loses value as price falls, so its liquidation price sits below entry. A short position loses value as price rises, so its liquidation price sits above entry — the signs on 1/Leverage and MM flip accordingly.
No. Trading fees, funding rate payments, and any unrealized PnL from other positions (in cross-margin mode) all shift the real liquidation price and are not modeled here.
Variables
| Symbol | Quantity | Unit |
|---|---|---|
| Liq. Price | Estimated liquidation price | currency |
| Entry Price | Position entry price | currency |
| Leverage | Leverage multiplier used | x |
| Maintenance Margin | Exchange's required maintenance margin rate |
What it means
In leveraged trading, the liquidation price is the price level at which the exchange will automatically close a position to prevent the account balance from going negative. It depends on the entry price, leverage, and maintenance margin. A higher leverage means a liquidation price closer to the entry price, increasing risk. This is used to set stop‑losses and to manage margin calls. Understanding the liquidation price is essential for traders using leverage, to avoid losing their entire position. It is a key risk metric in perpetual futures trading.
Worked example
Liquidation Price (Leveraged) – Two Detailed Examples
Real‑World| Parameter | Value |
|---|---|
| Entry Price | $60,000 |
| Leverage | 10x |
| Maintenance Margin | 0.5% |
| Parameter | Value |
|---|---|
| Entry | $3,000 |
| Leverage | 5x |
| Maintenance Margin | 1.0% |
Common mistakes
- Leverage: The leverage multiplier (e.g., 10 for 10x).
- Maintenance margin: The minimum collateral required to keep the position open (usually a percentage).
- Entry price: The price at which the position was opened.
- Assumption: Simplified linear approximation – actual liquidation may vary by exchange.
Applications
Liquidation price (leveraged position) estimates the price at which a leveraged position will be forcibly closed by an exchange to prevent further losses. This is critical for traders using margin or futures. By calculating the liquidation price, traders can set appropriate stop‑loss levels and monitor their risk. It also helps in deciding the leverage level and in adjusting position sizes. Exchanges display this metric to warn users. Understanding liquidation price is essential to avoid losing all collateral, especially in volatile markets. It is a key part of risk management for leveraged trading.
- Setting stop‑loss orders above liquidation price
- Choosing appropriate leverage levels
- Monitoring risk exposure in futures and margin trading
- Preventing forced liquidation in volatile markets
- Educational understanding of leverage risks
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