Estimated Liquidation Price Calculator
Estimate liquidation price based on leverage multiplier and maintenance margin buffer.
How the Calculation Works
Read parameters and compute total exposure: multiply order quantity by contract unit multiplier.
Evaluate terminal return at the selected target price using strict financial mathematical boundary logic.
Deduct upfront capital commitments, taxes, or net debits to produce final net profit or loss realization.
Calculation Formula
Example Calculation
Long position entered at ₹24,500 with 10x leverage and 0.5% maintenance margin requirement.
With 10x leverage (10% margin), a 9.50% drop consumes your equity buffer down to the 0.5% maintenance threshold, triggering liquidation.
Assumptions & Parameters
- Model assumes isolated margin rules. Cross-margin account balances can buffer liquidation points.
Frequently Asked Questions
What is a liquidation price?
The liquidation price is the market price at which your losses deplete your margin buffer, forcing the broker to close the position.
Why is this labeled an 'Estimated' liquidation price?
Actual liquidation varies across exchanges depending on bankruptcy fees, funding rates, index vs mark price, and queue priority.
How does higher leverage affect liquidation price?
Higher leverage moves the liquidation price significantly closer to your entry, meaning small fluctuations can wipe out the trade.
How can I prevent forced liquidation?
Use strict stop-loss orders well ahead of the liquidation threshold, lower your leverage multiplier, or add margin buffer.
What is maintenance margin?
Maintenance margin is the bare minimum percentage of equity required to keep a leveraged contract active.
Does isolated margin differ from cross margin?
Yes. Isolated margin risks only capital allocated to that specific trade, while cross margin risks your entire account balance.