Your liquidation price is the level at which the exchange force-closes a leveraged position because your collateral can no longer cover the loss. For isolated margin you can estimate it before you enter: the higher the leverage, the closer liquidation sits to your entry. It is not a forecast — it is the arithmetic of your collateral.
What it is — the price at which the exchange closes the position for you because no margin is left. Beyond it, the market has nothing more to move against.
What drives it — almost entirely leverage. Distance to liquidation is roughly 1/leverage: ×10 is about a 10% move, ×50 about 2%.
How to find yours — calculate it before you enter, not after. Open the liquidation calculator and plug in entry, leverage and side.
liquidation, as a share
before close-out
in lower tiers
and cross margin
What's inside
- What a liquidation price is
- The formula: how to calculate it
- Leverage and distance: a table
- 5 things that move your liquidation
- Isolated vs cross margin
- 3 ways to push liquidation away
- Common mistakes
- Calculator vs mental math
- When the formula lies
- Checklist before you enter
- Frequently asked questions
What a liquidation price is
When you open a leveraged position, you put up only part of its value — that is your margin, your collateral. The exchange effectively lends you the rest. While price moves your way, all is fine. But if the market moves against you, the loss eats into the collateral. The liquidation price is the level at which the loss nearly equals your posted margin, and the exchange closes the position itself so it doesn't end up underwater on the funds it lent.
It is crucial to see how liquidation differs from a stop-loss. A stop-loss is something you set yourself — a deliberate "this is where I exit." Liquidation fires automatically and asks no questions: it happens where you simply ran out of money to back the position. At liquidation you lose the entire collateral (and sometimes more, to fees and slippage). So healthy trading is built so that the stop always triggers first, and the liquidation price is never even reached.
Another common mix-up is your liquidation price versus the liquidation map. The map shows where other people's positions cluster — the whole market's levels. The liquidation price discussed here is your personal point, set only by your entry, leverage and margin mode. The map is about the crowd; the formula is about you.
The formula: how to calculate it
For isolated margin you can estimate the liquidation price ahead of time. The exact value the exchange computes with tiers, fees and funding, but the approximation lands on almost the same number and is perfect for planning an entry.
For a long, liquidation sits below entry:
Liquidation ≈ Entry × (1 − 1/Leverage + MM)
For a short — above entry:
Liquidation ≈ Entry × (1 + 1/Leverage − MM)
Here "MM" is the maintenance margin rate: the minimum share of position value the exchange requires you to keep for the position to stay open. For lower tiers of major USDT perpetuals it is around 0.5%. This adjustment nudges liquidation slightly closer to entry — meaning you get closed a touch earlier than the "bare" level.
Let's run the numbers. A long at 1000 with ×10 leverage. Without the adjustment, distance = 1/10 = 10%, i.e. 900. With MM 0.5%: 1000 × (1 − 0.1 + 0.005) = 1000 × 0.905 = 905. A drop of about 9.5% from entry and the position is gone. Plug in ×20 and the allowed move shrinks to ~4.5%. That is exactly how leverage turns a "small pullback" into a total loss of collateral.
Leverage and distance: a table
The link between leverage and the allowed move is worth memorising — it explains why high leverage gets liquidated "out of nowhere." Distances below include a 0.5% maintenance margin; the figure drifts a little across exchanges and tiers, but the order of magnitude holds.
| Leverage | Move to liquidation | What it means in practice |
|---|---|---|
| ×2 | ≈ 49.5% | A huge buffer. Liquidation is almost irrelevant — any sane stop fires first. |
| ×5 | ≈ 19.5% | A comfortable corridor. Ordinary daily volatility won't reach you. |
| ×10 | ≈ 9.5% | Already close. A single sharp news impulse can graze the level. |
| ×20 | ≈ 4.5% | Dangerous. A normal BTC candle can close the position in minutes. |
| ×50 | ≈ 1.5% | Almost a lottery. A tiny move plus slippage is enough to wipe you out. |
| ×100 | ≈ 0.5% | Market noise = liquidation. The spread and a candle wick eat the whole buffer. |
→ Scroll the table right
5 things that move your liquidation
- Leverage. The main lever. Halve the leverage and the distance to liquidation nearly doubles. It is the most direct way to control risk.
- Added margin. In isolated mode you can top up the collateral on a position to push liquidation away. But that raises the amount at risk — it doesn't remove the risk.
- Margin mode. Isolated caps losses to one position but liquidates earlier. Cross pulls in the whole balance — it moves the level out, but puts the entire account on the line.
- Funding rate. On long holds, funding is debited from margin and slowly drags liquidation closer. On short trades the effect is barely noticeable.
- Position tier. The larger the size, the higher the required maintenance margin — big positions have a liquidation level closer than the base formula suggests.
Isolated vs cross margin
The same entry at the same leverage gives a different liquidation price depending on margin mode. You need to understand the difference before you enter, not discover it at the moment of close-out.
Isolated margin. Only the collateral you allocated is tied to the position. If price reaches the liquidation level, you lose that collateral — and not a cent more. The rest of your balance is untouched. The formula above works for exactly this mode: the level is fixed and predictable. The downside — the cushion is smaller, so you get liquidated earlier.
Cross margin. Your whole free balance serves as collateral. Liquidation moves further out because the cushion is bigger. But the price of that is catastrophic: on a strong move, it is not one position on the line but the entire account. Cross forgives small swings and ruthlessly punishes a large shock.
A practical rule for most people: a beginner, and anyone trading directionally with leverage, is safer on isolated margin — it turns losses into a known, capped amount. Cross fits narrow scenarios (hedging, for instance) where you deliberately manage the whole balance.
Know your liquidation price before you enter
Moami's free calculator computes the liquidation level off the live market price: plug in entry, leverage and side, and see the point and the distance in percent. And to size a position safely against your stop, there's a position size calculator right next to it.
3 ways to push liquidation away
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Lower the leverage — it's free
The most honest method. Moving from ×20 to ×5 widens the allowed move from ~4.5% to ~19.5% at the same collateral at risk. High leverage doesn't "increase profit" — it only brings the mine closer. Less leverage means a more distant liquidation and calmer sleep.
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Size from the stop, not from the leverage
The healthy order is the reverse of habit: first decide where your invalidation (stop) is, then size the position so the risk is ≤1% of the account. With that approach, liquidation ends up far beyond the stop and simply doesn't enter the scenario. Size against your stop in the position size calculator.
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Add margin by plan, not in panic
In isolated mode, adding collateral moves the level out. But do it by plan before the trade, not to "rescue" a losing position in the moment — averaging into yourself on emotion turns a managed loss into an unmanaged one. If you feel the urge to add into a loss, closing is usually the right call.
Practical tip. Make it a rule: your stop must always fit between the entry price and the liquidation price, with room to spare. If the stop ends up beyond liquidation, the leverage is too high. Lower it until the stop is comfortably ahead of the forced close-out level.
Common mistakes
Treating liquidation as a substitute for a stop. "I already have a liquidation level, why bother with a stop" is the most expensive thought in trading. Liquidation takes the entire collateral; a stop takes only the planned 1%. They are tools of a different class.
Checking the level after entry. Finding out your liquidation price once the position is already open is too late. You need to know it before the "buy" click: it is what tells you whether the leverage and size are sane.
Confusing cross and isolated. Opening a "safe" trade in cross mode and not noticing the whole account is exposed. Always check which margin mode is active before you enter.
Thinking high leverage is about profit. Leverage doesn't make the move bigger — it only brings liquidation closer. Profit comes from the right scenario and position size, not from a ×50 in the corner of the screen.
Calculator vs mental math
- A live market entry price — no need to type it in by hand.
- The level and distance in percent, instantly, for both long and short.
- An instant recalc when you change leverage — you see the corridor shrink.
- Free and no signup — right before you enter the trade.
- Match your specific exchange's exact tiers and fees to the cent.
- Decide for you what leverage is appropriate to your scenario.
- Place the stop — that is still your decision and your discipline.
- Judge whether you should enter at all — that needs a trade breakdown.
When the formula lies
In cross mode. The simple formula is built for isolated margin. In cross, the level depends on the whole balance and your other open positions — it is nearly impossible to do in your head, so rely on the exchange's data.
On large positions. A big size lands in a higher tier with elevated maintenance margin. The real liquidation will sit closer than the base 0.5% calculation shows.
During sharp flushes. In cascade moments price can blow through the level with slippage, and the actual close-out fills worse than calculated. Thin liquidity widens the gap.
On long holds. Accrued funding and fees quietly chip away at margin, and after weeks the liquidation level ends up closer than it was on the day you entered.
Checklist before you enter
Before opening a leveraged position, run down the list. If even one item is unchecked, cut the leverage or the size before you hit "buy."
- I know my liquidation price. Calculated before entry, not guessed after. The number is in front of me, not in my head.
- The stop is well ahead of liquidation. My stop fits between entry and forced close-out with room to spare. The market checks the stop before the collateral.
- I understand the margin mode. I know whether the position is isolated or cross, and I chose that mode on purpose.
- Risk ≤1% of the account. The position size is such that a stop-out costs no more than one percent of the deposit. Size is computed from risk, not from desire.
- The leverage is justified. I picked leverage for the scenario, not the maximum on offer. High leverage is a short distance to the mine, not more profit.
Editorial note. Moami AI provides probabilistic analysis — explanations and scenarios, never predictions. Liquidation price, distance and margin mode are part of the risk picture the AI team weighs against liquidity, leverage and price action to help you decide on data rather than emotion. Check it against your own trade inside the service.