Derivatives & Risk

What is liquidation price and how is it calculated?

Liquidation price is the price level at which a leveraged position is automatically closed by the exchange because the trader's margin can no longer cover the position's losses. It is calculated from your entry price, leverage, and the margin posted, adjusted for fees. For example, a long position opened at 10x leverage is typically liquidated after roughly a 10 percent adverse move, before the margin is fully exhausted. Higher leverage pushes the liquidation price closer to entry, leaving less room for normal volatility. Understanding this threshold is central to managing downside on any leveraged crypto trade.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.