Long or short, any leverage. Your liquidation price, your distance to it, and how funding drags it closer while you hold — with every step of the arithmetic shown, so the number stops being a surprise.
liq = entry × (1 − 1/L + m)Optional — the calculator works either way. We’ll send this setup to your inbox.
Same maintenance rate, every common leverage. The bar is the size of the move that ends the position. Rows in red cannot survive an ordinary day’s range.
| Leverage | Distance | Liq. price |
|---|
Lesson 2.2 of Futures Decoded computes exactly this by hand, on screen, in round numbers — then lesson 2.3 turns it into the only number that matters. Start with the free 20-minute course; no card needed.
Every exchange shows you a liquidation price on the order ticket. Computing it yourself matters anyway, because a number you were shown doesn’t stick and a number you produced does — and because the exchange’s number arrives after you’ve already chosen a size. Work it by hand once and you start feeling the distance every time you see a leverage setting.
1. Buffer. You posted margin. A slice of the position value — the maintenance margin — has to remain at all times. Margin minus maintenance is how much you can lose before the engine takes over.
2. Turn dollars into a price move. Divide the buffer by the number of units you hold. That’s how far price has to travel against you.
3. Apply it to entry. Subtract for a long, add for a short. That’s your liquidation price.
4. Say it as a percentage. Distance to liquidation = 1 ÷ leverage − maintenance rate. This is the number to internalise. Not your leverage, not your margin — the size of the move that ends the position.
The intuitive reading of 10× is “a 10% move wipes me out.” It’s almost right. The maintenance margin takes its cut off the front, so at a 0.5% rate you get 9.5%. Trivial here; at 50× it’s 2% − 0.5% = 1.5%, and at 100× the maintenance rate is half your entire buffer. The higher the leverage, the more of your room the exchange has already spoken for.
Funding you pay out reduces margin and pulls liquidation closer — the optional panel above shows how much. Fees do the same, once, at entry. Adding margin pushes it away, which is exactly why topping up an underwater position feels responsible and is one of the most reliable ways to turn a small loss into a large one.
Most venues liquidate on a mark price — a smoothed index across several exchanges — not the last trade on the chart you’re watching. A wick below your level may not liquidate you; you can be closed without the chart’s low ever reaching your level. It’s a defensive design and the right one, but it means the candle is not the trigger.
This tool uses the standard isolated-margin formula. Exchanges apply tiered maintenance rates that rise with position size, and conventions differ slightly between venues. Your exchange’s displayed number is the one that counts; this page shows you how it’s built.