How the calculation works
Liquidation happens when your margin can no longer cover the position's loss — specifically when the equity backing the position falls to the maintenance margin. For a linear (USDT-margined) perpetual, the closed form depends on side, leverage and the maintenance margin rate (MMR):
The 1÷lev term is your initial margin as a fraction of notional: at 10× you post 10% and survive a 10% move; at 25× you post 4% and survive roughly 4%, so higher leverage pulls the liquidation price toward entry. Maintenance margin is the smaller floor — the minimum equity the exchange demands to keep the position open — so liquidation triggers before your margin hits zero, not at it. In isolated mode only the position's own margin is at stake; in cross mode the rest of your wallet balance is added as a buffer, pushing the liquidation price further away but exposing the whole balance.
Key concepts
Maintenance margin rate (MMR)
The maintenance margin rate is the minimum fraction of notional you must keep as equity to hold the position open. When equity falls to this level, the exchange force-closes the position. It is tiered: a small position may sit at 0.4%, but as size grows the exchange raises the rate to 1% or more, which moves liquidation closer. Always read the rate from your exchange's tier table for the size you trade.
Leverage and the distance to liquidation
Leverage sets how much room the market has before you are liquidated. Roughly, the adverse move you can survive is 1÷leverage minus the maintenance margin: 5× gives about 20% of room, 10× about 10%, and 50× barely 2%. High leverage looks capital-efficient but leaves almost no buffer for normal volatility, and a brief wick can be enough to close you out before price recovers.
Isolated vs cross margin
In isolated margin only the margin assigned to that position can be lost, so liquidation depends solely on entry, leverage and MMR — clean and predictable. In cross margin the position draws on your whole wallet balance, so spare funds push the liquidation price further from entry. The trade-off is that a single losing position can drain the balance shared with every other open position. Most delta-neutral arbitrage runs isolated to keep each leg's risk contained.
Why fees and funding pull liquidation closer
This calculator ignores fees and funding, but live they both erode your margin. Taker fees are deducted at entry, and every unfavorable funding payment is debited from the position's equity. Less equity means liquidation triggers at a smaller adverse move than the formula suggests, so your real liquidation price is always a little closer to entry than the clean estimate — more so the longer you hold and the heavier the funding.
This is an estimate, not a guarantee
Treat the result as a clean upper bound, not the price you will actually be liquidated at. Fees and unpaid funding erode margin and pull the real liquidation closer; tiered maintenance margin rises as your position grows, moving it closer still; and in fast markets force-closes can fill worse than the trigger price. Never trade at the edge of liquidation — a margin buffer is essential, and conservative leverage is the cheapest insurance against a single wick wiping you out.
Frequently asked questions
How do you calculate the liquidation price of a perpetual position?
Start from your entry price and adjust it by the room your margin gives, less the maintenance margin the exchange keeps. For a long on a USDT perpetual: liq = entry × (1 − 1÷leverage) ÷ (1 − MMR). For a short, add instead of subtract: liq = entry × (1 + 1÷leverage) ÷ (1 + MMR). The 1÷leverage term is your initial margin fraction; MMR is the maintenance floor. In cross margin, add your spare wallet balance divided by position size to the leverage term, which pushes the price further from entry.
What is the liquidation price formula for longs and shorts?
Long: liq = entry × (1 − 1÷leverage) ÷ (1 − MMR). Short: liq = entry × (1 + 1÷leverage) ÷ (1 + MMR). A long is liquidated by price falling, so the liquidation price sits below entry; a short is liquidated by price rising, so it sits above. The distance, as a percent, is |liq − entry| ÷ entry × 100. This is the linear (USDT-margined) form — inverse, coin-margined contracts use a different equation.
What is the difference between isolated and cross margin liquidation?
With isolated margin, only the margin assigned to that one position can be lost, so its liquidation price depends solely on entry, leverage and MMR. With cross margin, the position can draw on your entire wallet balance, so any spare funds act as a buffer and push the liquidation price further from entry. The downside is shared risk: one bad position can pull the balance down and bring every other cross position closer to liquidation. Isolated keeps each position's risk contained; cross trades that containment for a wider buffer.
What is maintenance margin and how does it affect liquidation?
Maintenance margin is the minimum equity, as a fraction of notional, that the exchange requires to keep a position open. When your equity falls to this level the position is force-closed — so liquidation triggers before your margin reaches zero, not at it. A higher maintenance margin rate moves the liquidation price closer to entry. It is tiered: as your position grows the exchange raises the rate, typically from around 0.4% on small sizes to 1% or more on large ones, so big positions are liquidated sooner than the headline leverage implies.
Why is my real liquidation price closer than this calculator shows?
Because the formula here is a clean estimate that excludes fees and funding. Live, taker fees are deducted at entry and every unfavorable funding payment is debited from the position's equity, so you have slightly less margin than the inputs assume. Less equity means liquidation triggers at a smaller adverse move, pulling the real price toward entry — and the effect grows the longer you hold and the heavier the funding. Tiered maintenance margin on larger sizes moves it closer still. Always keep a buffer beyond the calculated price.
How much leverage is safe to avoid liquidation?
There is no universally safe number — it depends on the asset's volatility and how much room you want. As a guide, the adverse move you can survive is roughly 1÷leverage minus the maintenance margin: 3–5× leaves 20–30% of room and is comfortable for most pairs, while 20× or more leaves under 5% and can be closed by ordinary noise. For delta-neutral arbitrage, conservative leverage with a margin buffer matters more than maximizing size, because both legs must stay open through volatility for the position to remain neutral.