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PerpetualsIntermediate·5 min read

Perpetual Liquidation Price

Liquidation occurs when a leveraged position no longer has enough margin to satisfy the venue’s maintenance requirements. The exact calculation depends on the market and margin model.

Key idea

Higher leverage usually leaves less room for adverse price movement. Always use the venue’s own displayed liquidation estimate for the position you are creating.

01

Leverage compresses the buffer

With more leverage, less margin supports a larger position. That generally moves the liquidation threshold closer to entry.

02

Margin model changes the calculation

Adding margin can increase the buffer. Cross and isolated margin treat available collateral differently, so the same position size can have different liquidation behavior.

03

Use the live venue estimate

Maintenance requirements, fees and market-specific rules affect the real threshold. Treat simple formulas as intuition and the trading venue’s live estimate as the operational number.

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