Liquidation Price
Also known as: liq price, forced-close price, bust price, liquidation level
What is it?
The liquidation price is the level at which the exchange force-closes your leveraged position because the margin backing it has fallen to the maintenance minimum. It follows directly from your leverage. Your margin can absorb a move roughly equal to one divided by your leverage before it is exhausted, less the maintenance margin the venue insists you keep: a 10x long is liquidated by about a 9% adverse move, 25x by about 3.6%, and 50x by less than 2%. Adding margin to an open position pushes the level further away; taking profit out pulls it closer.
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Price drop from entry 3.0 / 9.5 %32% of limit used 10x liquidates near a 9.5% adverse move
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Margin consumed 32 / 100 %32% of limit used Force-closed once this reaches 100%
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Same 3% drop, but at 25x 3.0 / 3.6 %83% of limit used 25x liquidates near 3.6% - almost gone
On an isolated-margin position only the margin assigned to that trade is at stake, while cross margin lets your whole balance defend it - and therefore puts your whole balance at risk. Treat it as a hard floor rather than a stop loss, because it behaves nothing like one. A liquidation is executed by the venue at whatever the book offers, usually with a penalty fee, and in fast conditions the fill can be materially worse than the level shown. A stop loss you place yourself sits above that floor by your choice and closes the position on your terms.
Any leveraged position that relies on the liquidation engine as its risk control has no risk control. Your capital is at risk. See /risk-warning.
Why it matters: It is the exact adverse move that ends your position, and it tightens fast with leverage - 10x liquidates near 9%, 25x near 3.6%.
Liquidation price (long, isolated) = entry x (1 - 1 / leverage + maintenance margin rate)
It is the point at which the trade is taken out of your hands entirely, so it bounds every leveraged position you hold regardless of how right the thesis eventually is.
Real-world example
A 10x BTC long opened at $60,000 with a 0.5% maintenance rate liquidates near $54,300, so a 9.5% drop closes the position even if price recovers an hour later.
How SignalBots handles it
SignalBots crypto signals publish the stop level with the entry, so you can size the position such that the stop is hit well before the liquidation price is ever reached. See /risk-warning.
Pro tip
Size every leveraged trade so your own stop loss sits comfortably inside the liquidation level - if the two are close together, the leverage is too high for that setup.
Common pitfalls
Using high leverage on a volatile instrument so the liquidation level sits inside the normal daily range, which turns ordinary noise into a total loss of margin.
Frequently asked questions
How do I move my liquidation price further away?
Add margin to the position or reduce its size; both increase the percentage move it can absorb. Lowering leverage before you enter achieves the same thing and is usually the cleaner choice.
Is a liquidation the same as a stop loss?
No. A stop loss is a level you choose and it closes the position on your terms. A liquidation is the venue force-closing you at the market, typically with a fee, once maintenance margin is breached.
What is the difference between isolated and cross margin here?
With isolated margin only the margin assigned to that trade can be lost, so the liquidation price is fixed and contained. With cross margin your whole balance backs the position, which pushes the level further away but puts far more capital at risk.
Do I get liquidated at exactly the liquidation price?
That is the trigger, not a guaranteed fill. The engine closes the position into the live book, so in fast or thin conditions the realised price can be worse. Your capital is at risk. See /risk-warning.
Which price triggers it - the last trade or the mark?
The mark price, which is built from a multi-exchange index. That is why a brief wick on one venue may not liquidate you, and why the last-trade chart is the wrong thing to measure your buffer against.
Trading involves substantial risk of loss. Historical and backtested results do not guarantee future performance. Read the full risk warning.
