The Complete Guide to Leverage and Liquidation Price
By Arshi Khan, Founder of Just4Marketing · Last reviewed October 2026
Leverage lets you open a position larger than your collateral, but it also sets a price at which the exchange closes your position and keeps your margin. Knowing that liquidation price before you trade is essential. This guide shows how it's calculated for isolated margin, how quickly it moves closer as leverage rises, and why exchanges' figures can differ slightly.
Leverage and distance to liquidation
The higher the leverage, the smaller the price move it takes to wipe out your margin. As a rough rule, the move is a little under 1 ÷ leverage: about 10% at 10×, 5% at 20×.
| Leverage (entry $60,000, 0.5% MMR) | Long liquidated at | Short liquidated at |
|---|---|---|
| 2× | $30,151 (−49.75%) | $89,552 (+49.25%) |
| 5× | $48,241 (−19.60%) | $71,642 (+19.40%) |
| 10× | $54,271 (−9.55%) | $65,672 (+9.45%) |
| 20× | $57,286 (−4.52%) | $62,687 (+4.48%) |
| 50× | $59,095 (−1.51%) | $60,896 (+1.49%) |
| 100× | $59,698 (−0.50%) | $60,299 (+0.50%) |
Managing liquidation risk
Use a stop-loss well before liquidation
Close the trade yourself at a planned loss rather than letting the exchange liquidate you, which often adds a fee.
Size positions by risk
Use the position size calculator to decide how much you can lose before choosing leverage.
Watch funding rates
On perpetual futures, funding payments slowly change your margin and therefore your liquidation price.
Volatility spikes
Crypto can move 5%–10% in minutes. At high leverage, a brief wick can liquidate a position that would otherwise have recovered.
This calculator is for education and planning. It isn't financial advice, and leveraged trading can lose your entire margin.
Frequently asked questions
How is liquidation price calculated?
In isolated margin, you're liquidated when your margin minus your unrealized loss falls to the maintenance margin. For a long, liquidation price = entry × (1 − 1/leverage) ÷ (1 − maintenance margin rate). For a short, it's entry × (1 + 1/leverage) ÷ (1 + maintenance margin rate).
Why does my exchange show a slightly different price?
Exchanges include trading fees, funding payments, and tiered maintenance margin rates that rise with position size. Cross margin uses your whole account balance as collateral, which moves the liquidation price further away. Treat this calculator as an estimate and always check your exchange's figure.
What is the maintenance margin rate?
It's the minimum margin, as a percentage of position value, that you must keep to avoid liquidation. Many exchanges start around 0.4%–0.5% for major coins on smaller positions and raise it for larger positions and riskier assets.
Does more margin change the liquidation price?
With the same leverage, no — doubling your margin doubles your position size, and the liquidation price stays the same. Adding margin to an open position without increasing its size lowers your effective leverage and moves the liquidation price further away.