Simplified isolated-margin estimate. Actual liquidation depends on fees, funding, margin mode (cross vs. isolated), added margin, and your exchange’s exact formula and maintenance-margin tiers. This is educational, not financial advice.
How it works
Leverage sets your initial margin as a fraction of position value (1 ÷ leverage). You are liquidated when losses eat that margin down to the maintenance level. So a long is liquidated near entry × (1 − 1/leverage + maintenance margin) and a short near entry × (1 + 1/leverage − maintenance margin). The higher the leverage, the smaller the move it takes to get there — which is why perpetual futures reward respect for position size.
FAQ
How is liquidation price calculated?
For an isolated-margin perpetual, a long is liquidated roughly at entry × (1 − 1/leverage + maintenance margin rate), and a short at entry × (1 + 1/leverage − maintenance margin rate). Higher leverage shrinks 1/leverage, pulling the liquidation price closer to entry.
What is the maintenance margin rate?
The minimum equity, as a fraction of position value, you must keep to avoid liquidation. It varies by exchange and by position size (often 0.4%–1% for liquid majors, higher for smaller markets). Enter your venue’s figure for a closer estimate.
Does higher leverage move the liquidation price closer?
Yes. At 5× leverage a long can fall roughly 20% before liquidation; at 20× only about 5%. More leverage means a smaller adverse move wipes the position — the core risk of leveraged perpetuals.