Liquidation price calculator

key_takeaways

Key takeaways

• The higher the leverage, the closer liquidation sits to your entry.
• For the same inputs, any maintenance rate above zero puts the liquidation price closer to your entry.
• Perpetual contracts usually trigger liquidation on the mark price, not on the last traded price.

Enter entry, leverage and the maintenance margin rate from your venue.

How to use the liquidation price calculator

1. Choose long or short.
2. Enter your entry price and leverage.
3. Enter the maintenance margin rate that your venue applies to your position size. The example value is invented, because there is no rate that fits every venue and size.
4. Optional: add the position size, extra margin you assign to this position, and your stop-loss price.
5. Read the liquidation price, its distance from entry, and the stop check. The result updates as you type.

If you leave the maintenance rate empty, the calculator does not show a liquidation price. It shows the theoretical limit at a rate of zero instead. For the same inputs, any maintenance rate above zero puts the liquidation price closer to your entry; fees and funding are not part of this comparison.

Liquidation price formula

This calculator covers linear (USD-margined) contracts in isolated margin. In isolated margin, only the margin assigned to the position stands behind it.

Margin per coin   M = entry / leverage + extra margin / size
Long   liquidation = (entry - M) / (1 - MMR)
Short  liquidation = (entry + M) / (1 + MMR)

Where it comes from. A position is liquidated when its equity falls to the maintenance requirement at the mark price P. For a long, equity per coin is M + (P - entry) and the requirement is MMR x P. Setting M + P - entry = MMR x P gives P = (entry - M) / (1 - MMR). For a short, equity per coin is M + (entry - P), which gives P = (entry + M) / (1 + MMR).

Variables. MMR is the maintenance margin rate as a fraction, not as a percentage. Leverage is position value divided by the margin you post. Extra margin is cash you add to this one position, spread over the coins you hold.

Worked example

What is the estimated liquidation price?

The label “est. liq. price” stands for estimated liquidation price. It is an estimate because it depends on things that change while the position is open: the margin left after fees and funding, the maintenance rate for your size, and the price the venue uses for liquidation. Treat the number as a moving target and look at it again after every change to the position.

The liquidation price is the price at which the margin left in the position no longer covers the maintenance requirement. Venues then close the position, often in steps, and may charge a liquidation fee. What is left over, if anything, depends on how fast price moved through that level.

How much room does high leverage leave?

At a given leverage you post the position value divided by the leverage as margin, and the maintenance requirement takes a slice of it. The higher the leverage, the closer liquidation sits to your entry. The worked example shows the effect at other settings.

Whether a distance is enough depends on your stop, not on the leverage label. See the leverage calculator for margin and position value at a given leverage.

Mark price and tiered rates: what venues use

Perpetual contracts usually trigger liquidation on the mark price, not on the last traded price. In most designs the mark price is built from an index of spot prices. A short wick on the last price does not always reach it, and in a fast market the two can sit apart. Compare the liquidation price with the mark price your venue shows.

Maintenance margin rates are usually tiered: the larger the position, the higher the rate that applies, and in some designs a fixed maintenance amount is subtracted as well. This calculator uses one rate. It is exact only inside the tier you enter, so look up the tier for your size and enter that rate.

Cross margin: why there is no single number

In cross margin, your whole account balance backs every open position. The liquidation price of one position then depends on the other positions, their unrealized profit or loss, and the free balance. The calculator does not model this, because one entry, one leverage and one rate cannot describe it. If you run cross margin, use your venue’s own figure and read isolated vs cross margin for the trade-off.

Limits of this calculator

• Linear contracts only. Contracts margined in the traded coin (inverse) use different formulas.
• One maintenance rate. Tiers, maintenance amounts and liquidation fees are not modeled.
• No fees and funding. Fees reduce your margin and move the real liquidation price closer to entry. Funding moves it either way, depending on whether you pay or receive it.
• Isolated margin only. Cross margin depends on the whole account.
• Static snapshot. Partial liquidation, auto-deleveraging and price gaps are not modeled. A fast move can fill a liquidation worse than its trigger price.
• Estimates. Your venue’s own figure decides.

Liquidation, in questions

How do I calculate my liquidation price?

For an isolated long on a linear contract, take margin per coin M as entry divided by leverage, plus any extra margin divided by position size. The liquidation price is (entry - M) / (1 - MMR), where MMR is the maintenance margin rate as a fraction. For a short it is (entry + M) / (1 + MMR). Fees and funding are not included.

What is the estimated liquidation price?

It is the price at which your venue expects the margin left in the position to fall to the maintenance requirement. It is an estimate because fees, funding, margin changes and the venue’s tier for your size can move it while the position is open.

Why does my venue show a different number?

Venues add details this calculator leaves out: tiered maintenance rates by size, a maintenance amount, fees and funding already paid, a liquidation fee, and the mark price at that moment. Use this result as an estimate and treat your venue’s figure as the reference.

Does adding margin move the liquidation price?

In isolated margin, yes. Extra margin raises the margin per coin and pushes liquidation further from entry. The added money is then also at risk in that position.

Is liquidation triggered by the last price or the mark price?

On perpetual contracts it is usually the mark price, a reference that in most designs is built from an index of spot prices. That reduces liquidations caused by a wick on one order book. Check your venue’s documentation for how its mark price is built.

Where should my stop sit relative to liquidation?

Between entry and liquidation, with room for slippage and fees. If the stop is at or beyond the liquidation price, liquidation comes first and the stop never protects you. Lower leverage, a smaller size or extra margin all move liquidation further away. Also check whether your stop triggers on the mark price or the last price.

What is the best leverage for beginners?

There is no single answer, and this tool gives no recommendation. A useful way to frame it: pick the stop distance your trade idea needs, then check that the liquidation price sits well beyond it. If it does not, the leverage is too high for that stop.