Liquidation Calculator

The Liquidation Calculator estimates the price at which a leveraged trade closes. Simply enter your Entry Price, Position Size, and Leverage to calculate your Liquidation Price and margin requirements. This tool helps traders understand risk levels. This calculator also calculates Initial Margin and Maintenance Margin Value.

Enter the price at which you opened the trade (e.g., 50000.00)
Enter the amount of the asset you are trading (e.g., 0.5)
Enter your leverage multiplier (e.g., 10 for 10x)
Enter the exchange margin rate percentage (e.g., 0.5)
Select if you are buying (Long) or selling (Short)

This calculator is for educational purposes only. It is not intended to provide financial advice. Consult a financial advisor for personalized guidance.

What Is Liquidation Price

Liquidation Price is the specific price at which an exchange may close your trade to stop further losses. It happens when the money you put down for the trade is almost gone. This price helps you see how far the market can move against you before your position ends.

How Liquidation Price Is Calculated

Formula

Long: Entry Price × (1 - (1 / Leverage) + Margin Rate)

Short: Entry Price × (1 + (1 / Leverage) - Margin Rate)

Where:

  • Entry Price = Price when you opened the trade
  • Leverage = How many times your money is multiplied
  • Margin Rate = The percent of value you must keep

To find this price, the calculator looks at how much money you borrowed compared to what you own. For a Long position, it subtracts your borrowed amount safety buffer from your starting price. For a Short position, it adds that buffer. This shows exactly where your safety margin runs out based on the rules of leverage.

Why Liquidation Price Matters

Knowing this price is key to keeping your money safe. It tells you the exact point where a trade stops working, so you can plan your stops and limits ahead of time.

Why Risk Limits Are Important for Trading

If a trade hits the liquidation price, you may lose the entire amount you put in. Ignoring this number can lead to fast and heavy losses that are hard to recover. Understanding this limit helps you choose safer trade sizes and leverage levels.

For Long Positions (Buying)

When you buy, you want the price to go up. The liquidation price is below your entry price. If the market price drops and hits this lower level, the trade closes automatically to prevent the loss from growing larger than your initial funds.

For Short Positions (Selling)

When you sell, you want the price to go down. The liquidation price is above your entry price. If the market price rises and hits this higher level, the trade closes to stop further losses on your borrowed assets.

Calculation logic verified using publicly available standards.

View our Accuracy & Reliability Framework →