A liquidation price calculator helps you calculate at what price level your leveraged position gets liquidated.
Liquidation Price: $0.00
When leverage increases, liquidation moves closer to your entry. No fees included.
How to use the liquidation price calculator
Follow this simple step-by-step guide to find out the liquidation price of your trade.
- Input the entry price (e.g $250, or $24.000)
- Add your leverage ratio. (e.g 5, 10, 55, or 155..)
- Click Calculate.
The calculator shows the liquidation threshold so you can quantify downside before committing margin. The tool below uses a formula to calculate the liquidation price based on the entry price + leverage ratio.
The tool isolates the core liquidation formula. Funding, fees, and position size are separate inputs you manage at platform level.
This calculator also assumes that you are using an isolated margin for one single position and does not take into consideration the additional margin you might have in your account.
What is a liquidation price calculator?
A liquidation price calculator is a tool that traders use to find out at what price their leveraged position will get liquidated if the market were to go the wrong way.
It is an essential tool for both long-term and short-term traders who want to have full control of their risk while operating with leverage ratios that are higher than 1:2 to 1:5.
Knowing the liquidation level helps you structure your stop placement and risk boundaries before entering.
Keep in mind that the liquidation price is not the same as a margin call where the broker will send you a notification that you are running out of margin requirements.
How to calculate the liquidation price
To calculate the liquidation price you first need to know at which ratio you are trading.
Let’s say that you are trading a ratio of 1:65.
The first step is to calculate the distance to your liquidation point in percentage.
To do this simply divide 100 by 65.
100 / 65 = 1.54%
Now you know that your liquidation price is 1.54% away from your entry price.
All that is left to do is to calculate 1.54% below the entry price of the asset you are currently trading.
As an example, we assume that you are trading the Tesla stock which is currently priced at $233.
Now, deduct -1.54% from the price of $233.
233 x 0.0154 = $3.60
The last step is to subtract this from the entry price.
233 – 3.60 = $229.40
The liquidation price in this example is $229.40.
Formula
Here is a summary of the liquidation price formula.
Calculate liquidation distance in percentage = 100 / Leverage Ratio (100/65 = 1.54%)
Calculate the liquidation distance in price = Current Asset Price x Distance In Percentage ($233 x 0.0154% = $3.60)
Calculate the liquidation price = Current Asset Price – Liquidation Price Distance ($233 – $3.60 = $229.40)
Here is how the liquidation price calculator works
The liquidation price is calculated by taking into account the opening price of a trade and the leverage ratio.
The calculator combines your entry and leverage ratio to estimate the point where margin is depleted.
Depending on what leverage ratio you choose to use and at what price you enter your trade, the result will be different.
Different leverage trading platforms for crypto offer different ratios which can be hard to tell at first glance, but spend some time researching them and you will figure it out.
Higher leverage compresses the distance to liquidation. Lower leverage expands it.
Explanation of the formula
The liquidation price is calculated by using the formula: liquidation price = entry price – (1/leverage ratio) * entry price.
This formula is based on the idea that the liquidation price is the point at which the trade is closed due to a 100% loss of margin.
The leverage ratio is the driver of the potential distance to the maximum loss.
Frequently asked questions
To set better stop loss orders first calculate the current liquidation price. Once you know the correct level you can add your stop loss orders at a higher level to prevent outsized losses.
The process of assessing at what level your asses will suffer a complete loss can be done by using the correct formula for your trade. In the case of a leveraged position with an isolated margin the formula is liquidation price = entry price – (1/leverage ratio) * entry price
The calculator can not determine the margin requirements for a specific trade.