Estimate a liquidation price and understand the buffer before a position gets closed.

Liquidation happens when your margin is no longer enough to keep a leveraged position open. The exact rules depend on the exchange, but you can still estimate a liquidation price to understand how much room you have before the position is forced to close.

What liquidation price means

The liquidation price is the level where your margin plus any unrealized PnL can no longer meet the maintenance margin requirement. In practice, every exchange uses its own formulas, tiers, and fee rules. That is why this guide focuses on approximation, not precision.

What the calculator uses

The Liquidation Price tool uses:

• Entry price
• Position size (quantity or notional)
• Leverage
• Maintenance margin rate
• Direction (long or short)

With those inputs it estimates:

• Exposure (notional)
• Initial margin
• Maintenance margin
• Liquidation price (approx)
• Buffer to liquidation (absolute and %)

Why maintenance margin matters

Maintenance margin is the minimum collateral required to keep a position open. A higher maintenance rate moves the liquidation price closer to the entry. If you leave it blank or use a generic value, the result becomes less reliable.

Long vs short behavior

• Long positions liquidate below entry.
• Short positions liquidate above entry.

The tool accounts for direction so the liquidation estimate is positioned on the correct side of your entry.

Practical example

If you open a long at 42,000 with 10x leverage and a 0.5% maintenance margin:

• Exposure = entry × quantity
• Initial margin = exposure / leverage
• The estimated liquidation price sits several percent below entry

That buffer shows how far price can move against you before liquidation. Use it to decide if the trade has enough room.

Common mistakes

• Using a maintenance margin value from another exchange.
• Ignoring fees and funding in longer holds.
• Confusing liquidation price with a stop loss.
• Oversizing the position because the liquidation number looks far away.

Key takeaways

• Liquidation price is a warning line, not a target.
• Use it to validate position size and leverage choices.
• Always confirm the exact rules on your exchange.

Pair the Liquidation Price tool with Position Size and Margin & Leverage to build a safer workflow.