Liquidation Price Calculator

About Liquidation Price Calculator

Calculate margin call and liquidation prices. This calculator provides instant results with step-by-step explanations to help you understand the calculation process.

How to use this calculator

1. Enter the trade's entry price, margin, and position size.
2. Choose whether you want a margin call estimate, a liquidation estimate, or both if the tool offers both.
3. Click calculate to see the result and the working steps.
4. Compare the output with your exchange's contract rules, since liquidation rules can differ by platform.

The formula explained

• \(\text{Liquidation Price}\) = the price level where the position is liquidated
• \(\text{Entry Price}\) = the price at which the trade was opened
• \(\text{Margin}\) = the collateral placed on the position
• \(\text{Position Size}\) = the notional size of the position

Step by step method

1. Start with the entry price of the trade and the amount of margin committed.
2. Use the position size to determine how much price movement your margin can absorb.
3. Subtract that risk amount from the entry price to estimate the liquidation level.
4. Check the calculator's step-by-step solution to verify the inputs were entered correctly.

Worked example

Suppose you open a long position at 50,000 with 2,500 of margin and a position size of 25,000.

1. Compute the margin ratio: \(\frac{2500}{25000} = 0.1\).
2. Multiply by the entry price: \(0.1 \times 50000 = 5000\).
3. Subtract from the entry price: \(50000 - 5000 = 45000\).

Tips and common mistakes

• Use the exact contract type and leverage settings from your exchange, because liquidation rules are not identical everywhere.
• Make sure you enter the correct position side, since long and short positions move in opposite directions.
• Double-check whether fees, maintenance margin, or funding are included in the tool's assumptions.
• If the result looks off, confirm that you did not mix up margin and position size.

Frequently asked questions