Crypto Futures Liquidation Price Calculator (isolated)

Understanding the crypto liquidation price calculator — concept and principle

A leveraged crypto futures position is closed by force when its losses eat the margin down to the exchange's maintenance requirement. That trigger is the liquidation price. This calculator estimates it for one isolated-margin position on a linear (USDT-margined) contract, so you can see how far the market may move against you before the exchange steps in.

How it is calculated

• Long: liquidation ≈ entry × (1 − 1/L + m)
• Short: liquidation ≈ entry × (1 + 1/L − m)

L is the leverage and m the maintenance margin rate as a decimal (0.5% = 0.005). The calculator also shows the initial margin (1/L of the position value) and the distance to liquidation, |liquidation ÷ entry − 1|. Fees, funding payments and tiered margin are ignored, and the result is in the same price unit you enter.

The principle

With leverage L you post only 1/L of the position value as margin. A fall of 1/L (10% at 10×) would erase that margin entirely. The exchange closes the position earlier, while a small cushion, the maintenance margin, is still left, so the distance shrinks to about 1/L − m. A short mirrors this upward.

Strictly, maintenance margin is measured on the position value at the liquidation price, which gives entry × (1 − 1/L) ÷ (1 − m) for a long and entry × (1 + 1/L) ÷ (1 + m) for a short. At normal rates the difference is small.

Worked example

1. Inputs: entry 60,000, leverage 10×, long, maintenance margin 0.5%.
2. Initial margin: 1 ÷ 10 = 10% of the position.
3. Factor: 1 − 0.10 + 0.005 = 0.905.
4. Liquidation price: 60,000 × 0.905 = 54,300.
5. Distance: 54,300 ÷ 60,000 − 1 = −9.5% from entry.

The exact form gives 60,000 × 0.9 ÷ 0.995 ≈ 54,271, about 29 lower.

How to read the result

The distance is the move that wipes out your position. At 2× it is close to 50%, at 10× under 10% and at 50× under 2%, while bitcoin can move several percent in a day. If a routine daily move can reach the distance, the leverage is too high. A stop-loss well before the liquidation price limits the loss to a planned amount.

Common mistakes

• Treating the figure as exact. Trading fees, funding and the exchange's mark price move the real trigger.
• Watching the last trade instead of the mark price most exchanges use.
• Forgetting that larger positions fall into higher maintenance tiers, which pulls the liquidation price closer.
• Applying the isolated formula to cross margin, where the whole balance backs the position.

Frequently asked questions

Why does my exchange show a different liquidation price?

It includes fees, its own margin tiers and mark price. Use its figure for real orders.

Does adding margin move the liquidation price?

Yes. Extra margin in isolated mode lowers the effective leverage, so the liquidation price moves further from the market.

What happens to the margin at liquidation?

It is largely lost. Some exchanges also charge a liquidation fee or pass remaining funds to an insurance fund.

Sources: Binance Support, "How to Calculate Liquidation Price of USDⓈ-M Futures Contracts" · Bybit Help Center, "Liquidation Price (USDT Contract)"