Published · Justas · RektCalc
Most traders know liquidation exists. Fewer know the exact price before they open the trade. This piece gives you the formula, three worked examples, and one specific mistake I see constantly — stop-losses set so wide they're past the liquidation price and physically can't fire.
The formula
Perpetual futures on Bybit, Binance, OKX and most major exchanges use this calculation:
Long position:
liq_price = entry × (1 − 1/leverage + maintenance_margin_rate)
Short position:
liq_price = entry × (1 + 1/leverage − maintenance_margin_rate)
Maintenance margin rate on most major exchanges is 0.5% (0.005) for standard position sizes on BTC, ETH and major altcoins. This is the minimum margin the exchange requires — when your margin drops to this level, they force-close your position.
Worked examples
BTC at $100,000 entry, long position:
| Leverage | Initial margin % | Liq distance % | Liq price |
|---|---|---|---|
| 5× | 20% | 19.5% | $80,500 |
| 10× | 10% | 9.5% | $90,500 |
| 25× | 4% | 3.5% | $96,500 |
| 50× | 2% | 1.5% | $98,500 |
| 100× | 1% | 0.5% | $99,500 |
Using 0.5% maintenance margin rate. Exact values vary slightly by exchange and position size tier.
The pattern: liquidation distance = (1/leverage) − maintenance_margin_rate. At 10× that's 10% − 0.5% = 9.5%. At 50× it's 2% − 0.5% = 1.5%. A coin that moves 1.5% in 30 seconds during normal trading hours is common — at 50× you can get liquidated by noise.
The stop-loss trap
Here's where people go wrong. They know liquidation is at 9.5% away on a 10× long, so they set a stop at "10% below entry" thinking they have a buffer. They don't. Their stop is past their liquidation price.
The exchange liquidates at 9.5%. Your stop order at 10% queued to execute after that. But the position is already closed. The stop never fires — you're already out, with your full margin gone plus fees.
The rule: your stop must be closer to entry than the liquidation price. If liquidation is 9.5% away, your stop has to be at most 8–9% away to give the exchange time to process both events without them overlapping. On volatile markets with fast moves, even a stop at 9% on a 10× position is cutting it close — a spike can gap through your stop and go straight to liquidation.
Practical target: keep your stop at 60–70% of the distance to liquidation. At 10×, liq at 9.5% → stop at 5.7–6.7% from entry. This is why the default stop at 10× in scalping strategies is often 5–6%, not "just under liquidation."
What changes the liquidation price
Three things shift it after you open:
Adding margin. If you add collateral to an open position, the effective initial margin rises and liquidation moves further away. On Bybit this shows up as "Add Margin" in the position panel. Useful if you want to survive short-term volatility, but it increases your total at-risk capital.
Funding. Each 8-hour funding payment slightly reduces your margin (if you're paying, not receiving). Over many periods this slowly brings liquidation closer to entry. On a multi-week hold at 0.01%/8h the effect is small but real — roughly 0.9% of notional per month paid out of your margin.
Unrealized PnL on cross margin. In cross margin mode, unrealized gains from other positions add to the margin buffer. Unrealized losses from other positions eat into it. Your liquidation price on one position can change because another unrelated position is moving against you.
How to check yours before opening
Use the liquidation calculator — enter your entry price, leverage, and it shows the exact liquidation distance and price for both long and short. The stop vs liquidation gap calculator shows whether your stop actually clears the liquidation price or not.
On Bybit, the liquidation price also shows on the order entry form before you confirm — it's the number next to "Est. Liq. Price." Check it every time. Not because the formula is complicated, but because a quick glance takes two seconds and the alternative is discovering your stop was useless after the fact.