Crypto Liquidation Price Calculator (Leveraged Trading)

How to Use the Liquidation Price Calculator

Understanding your liquidation risk is vital in leveraged trading. Here’s how to use our tool:

1. Position Details: Select Long/Short, Margin Type (Isolated/Cross), Leverage, your Entry Price, and Position Size.
2. Collateral:
   • For Isolated Margin, enter the specific amount of margin assigned to this trade.
   • For Cross Margin, enter your total available account balance.
3. Maintenance Margin Ratio (MMR %): This is critical! Find this on your exchange for the specific asset. It's the threshold below which your position gets liquidated. (Commonly 0.4% to 1% for major pairs).
4. Optional Adjustments:
   • Unrealized PnL: If you have an open position, its current profit/loss affects your available margin (especially for Cross Margin).
   • Funding Rates: For perpetual swaps, funding fees are periodically paid or received, impacting your margin. Estimate the rate and how many periods you want to consider.
5. Calculate: See your estimated liquidation price and how close you are to it.

Understanding the Liquidation Formula (Simplified Concept)

While exchanges have their precise formulas, the core idea is that liquidation occurs when your margin drops to the maintenance margin level. The formulas for long and short positions are mirrors of each other:

For a Long Position:

Liquidation Price ≈ Entry Price - ((Effective Collateral - Maintenance Margin Value) / Position Size)

For a Short Position:

Liquidation Price ≈ Entry Price + ((Effective Collateral - Maintenance Margin Value) / Position Size)

Where:

• Effective Collateral: Your initial collateral for the trade (isolated margin amount, or total account balance for cross), adjusted for any unrealized PnL (for cross) and estimated funding costs.
• Maintenance Margin Value: The dollar value of the margin required to keep the position open, typically Position Value at Entry * Maintenance Margin Ratio.
• Position Size: The quantity of the crypto asset in your trade.

Our calculator uses these principles. Funding rates (for perpetuals) effectively reduce (if you pay) or increase (if you receive) your available margin over time.

Always refer to your exchange's specific documentation for their exact liquidation calculation and MMRs!

How to AVOID Crypto Liquidation (Risk Management)

• 🚫 Use Lower Leverage: The most effective way. Higher leverage = liquidation price much closer to entry.
• 💰 Use Sufficient Collateral: Don't overstretch your margin.
• 🛡️ Set Stop-Loss Orders: Predetermine your acceptable loss and set a stop-loss to close the position before liquidation.
• 📊 Understand MMR: Know your exchange's Maintenance Margin Ratio for the specific asset.
• Consider Isolated Margin: For riskier trades, isolated margin protects the rest of your account.
• ➕ Add Margin (If Necessary): If a position is nearing liquidation and you still believe in it, you can add more collateral (though this increases your total risk).
• 📰 Stay Informed: Be aware of market volatility and news that could impact your positions.

Trading Risk & Calculator Disclaimer

This Crypto Liquidation Price Calculator provides an ESTIMATE based on the inputs you provide and generalized formulas. Actual liquidation events and prices are determined by individual exchanges using their specific, often complex, calculation methodologies, which may also include factors like order book depth, insurance fund mechanics, and specific fee structures not fully modeled here. Market volatility can cause rapid price changes leading to liquidation sooner than estimated. Leveraged trading in cryptocurrencies is extremely risky and can result in the loss of your entire investment. This tool is for educational and informational purposes only and DOES NOT CONSTITUTE FINANCIAL ADVICE. Always do your own thorough research, understand the risks involved, and consider consulting with a qualified financial advisor before engaging in leveraged trading. Use this tool at your own risk.