{"id":16310,"date":"2026-10-14T09:50:51","date_gmt":"2026-10-14T09:50:51","guid":{"rendered":"https:\/\/backcom.io\/?p=16310"},"modified":"2026-10-15T09:23:00","modified_gmt":"2026-10-15T09:23:00","slug":"how-to-calculate-liquidation-price","status":"publish","type":"post","link":"https:\/\/backcom.io\/en\/how-to-calculate-liquidation-price","title":{"rendered":"How To Calculate Liquidation Price In Futures: Formulas, Examples And Risk Controls"},"content":{"rendered":"\n\n
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Many futures traders focus on leverage and potential profit when opening a position. Yet you can estimate liquidation price<\/strong> from three inputs: entry price, leverage and the maintenance margin rate<\/strong>. You also need to distinguish the mark price<\/strong> from the last traded price, especially during sharp market moves. In this article, Backcom.io explains how to calculate liquidation price<\/strong> for longs and shorts, works through BTC examples at 5x, 10x and 20x, and shows why your estimate may differ from the exchange\u2019s figure. The same mechanics apply on any international platform.<\/p>\n\n\n\n

What Is Liquidation Price And How Does It Differ From Mark Price?<\/h2>\n\n\n\n
\"What
What Is Liquidation Price And How Does It Differ From Mark Price?<\/figcaption><\/figure>\n\n\n\n

Liquidation price<\/strong> is the level at which an exchange\u2019s risk system may forcibly close some or all of a futures position when the mark price reaches it. Liquidation can begin when the remaining margin no longer meets the maintenance requirement.<\/p>\n\n\n\n

That threshold usually comes before your margin falls to zero<\/strong>. The price at which the margin would be entirely exhausted is called the bankruptcy price<\/em>. The distinction matters because a liquidation estimate does not tell you exactly how much cash will remain after the position is processed.<\/p>\n\n\n\n

With isolated margin, a liquidation can consume nearly all the collateral assigned to one position even after a market move of only a few percent. This is a key difference from ordinary spot trading, which has no leverage-driven liquidation mechanism. It also relates to margin requirements<\/a>, although the threshold depends on the specific product.<\/p>\n\n\n\n

Mark Price Versus Last Traded Price<\/h3>\n\n\n\n

Mark price<\/strong> is the reference used to assess unrealised profit or loss and liquidation risk. Exchanges derive it from a spot market index and their own adjustment mechanism. Last traded price<\/strong> is simply the price of the latest trade in the futures contract.<\/p>\n\n\n\n

Binance and OKX use mark price to assess liquidation. A candle wick on a last-price chart can therefore touch your displayed liquidation level without proving that your position was liquidated. Check the mark price chart and the position record if the two appear to disagree.<\/p>\n\n\n\n

Liquidation Price Formula For Isolated Long And Short Positions<\/h2>\n\n\n\n

The liquidation price formula<\/strong> starts with initial margin: under isolated margin, it is the position\u2019s notional value divided by leverage. For a quick estimate on a USDT-margined contract, use:<\/p>\n\n\n\n

Long liquidation price \u2248 Entry price \u00d7 (1 \u2212 1 \u00f7 Leverage + Maintenance margin rate)<\/strong><\/p>\n\n\n\n

Short liquidation price \u2248 Entry price \u00d7 (1 + 1 \u00f7 Leverage \u2212 Maintenance margin rate)<\/strong><\/p>\n\n\n\n

These simplified formulas assume:<\/p>\n\n\n\n