How to calculate your crypto liquidation price
Your liquidation price is where your margin balance falls to the maintenance margin. Work it out from your entry price, leverage and margin mode.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
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Knowing how to calculate a crypto liquidation price starts with your margin mode. Margin trading and crypto futures let you control a position larger than the deposit behind it, and the exchange closes the trade once losses eat into that deposit.
What you need before you start
The formula depends on how your position is margined. With isolated margin, one trade gets its own collateral, so the calculation uses the entry price, your leverage and the maintenance margin rate. With cross margin, your whole account balance backs every open position, so the price depends on all of them. The maintenance margin rate is the share of position value the exchange requires you to keep.
Steps to calculate the liquidation price
You can run the math yourself or use the calculator your exchange provides. The formula below is a common approximation for a USDT-margined isolated position, and it leaves out fees and funding.
- 1Pick your margin modeIsolated margin sets aside collateral for one trade. Cross margin draws on your whole account balance.
- 2Write down your numbersNote the entry price, leverage and maintenance margin rate for the trade.
- 3Check the rate tierFind the rate that matches your position size in the exchange's margin table. Rates usually step up in tiers.
- 4Apply the formulaFor a long, a common approximation is entry price times (1 minus 1 divided by leverage), divided by (1 minus the maintenance margin rate). For a short, swap the minus signs for plus.
- 5Compare with the calculatorEnter the same inputs into the exchange's tool. If the numbers differ, recheck the rate tier and the fee settings.
What to do after calculating
Your result is an estimate. Trading fees come out of your margin balance, and funding payments you owe do too, while funding you receive adds to it. The exchange can close the position sooner than your figure suggests, so recheck the number after fees are charged.
Frequently asked questions
Some exchange calculators include fees and others leave them out. If fees are left out, the real liquidation price sits closer to your entry price than the formula shows.
The exchange closes the position to stop further losses. With isolated margin you usually lose the collateral set aside for that trade, and with cross margin the exchange can take from the rest of your balance.
Yes. Adding collateral pushes the liquidation price further from your entry price, and taking margin out brings it closer.
