At what price does a leveraged long or short reach its simplified liquidation level?
A liquidation estimate combines entry price, leverage, maintenance margin and position direction. The long and short relationships move in opposite directions because adverse price movement is below entry for one and above entry for the other.
Direction, leverage and maintenance margin
Long liquidation = Entry × (1 − 1 ÷ Leverage + Maintenance%)Short liquidation = Entry × (1 + 1 ÷ Leverage − Maintenance%)A simplified long or short estimate
The default setup applies the formula’s leverage and maintenance-margin terms to the entered position direction. It reports the estimated liquidation price and distance from entry.
Illustrative inputs; currency amounts below use USD. Rates and prices are assumptions, not live quotes.
- Entry price
- $61,000.00
- Leverage
- 10
- Maintenance margin
- 0.5%
Step-by-step calculation
- Initial margin fraction = 1 ÷ 10 = 0.1; maintenance fraction = 0.5 ÷ 100 = 0.005.
- Approximate long threshold = 61,000 × (1 − initial fraction + maintenance fraction) = 55,205.
- Approximate short threshold = 61,000 × (1 + initial fraction − maintenance fraction) = 66,795. Exchange rules, mark prices, collateral and fees can produce different thresholds.
Intermediate figures are rounded for reading. Results use the full calculation precision.
Why leverage pulls liquidation closer
Higher leverage generally moves the liquidation estimate closer to entry. Maintenance margin also reduces the price distance available before the simplified threshold.
Exchange rules that change the live figure
Exchange engines include fees, funding, margin mode and tiered maintenance rules. Their displayed liquidation price can therefore differ from this transparent estimate.
- The position uses the direction and simplified relationship shown in the formula.
- Leverage and maintenance margin remain constant.
- Cross margin, added collateral, fees, funding and exchange tiers are excluded.
Calculations related to liquidation price
The following tools examine neighbouring parts of the same calculation without changing the inputs or assumptions used above.
References
Sources and conventions
- Bybit: liquidation rules by margin mode
An example of exchange-specific rules. Our simplified thresholds do not implement Bybit's liquidation engine or any exchange's current contract rules.
Quick answers
Frequently asked questions
Why are long and short liquidation prices different?
A long is adversely affected by a price drop, while a short is adversely affected by a price rise; the formulas move in opposite directions from entry.
How does maintenance margin affect liquidation price?
The entered maintenance percentage shifts the estimated liquidation level closer to the entry price.
Will this match my exchange's exact liquidation price?
Not necessarily. Exchanges may use fees, margin tiers, mark prices and account-level collateral rules not represented here.
Calculation method and limitations · Report an error
Educational content only. This guide is not financial advice.