What is an estimated liquidation price?

An estimated liquidation price is the reference price at which a platform estimates liquidation may be triggered under current account and position conditions. It indicates where an adverse price move may leave insufficient collateral to maintain the position, not a guaranteed execution price. Liquidation is the rule-based reduction or closure of positions that no longer meet collateral or other risk requirements.

How is the estimate calculated?

The core comparison is between remaining position equity and collateral required to continue holding it. Margin comprises assets supporting the position; including unrealized results on open positions produces equity. Maintenance margin is the platform’s minimum ongoing collateral requirement.

Adverse price moves cause losses that reduce equity. The platform uses quantity, entry price, margin, maintenance requirements and relevant fees to find the price at which equity cannot meet requirements. Changes to the account or position change the estimate.

For products using the mark price to assess contract risk, the estimate concerns mark-price moves, not only the last trade. The mark price is a rule-based valuation reference; its uses and formulas are explained in that entry.

A simplified calculation example

Consider a hypothetical isolated-margin long in a linear contract. Isolated means separately allocated margin; linear means price results equal quantity multiplied by the price difference. A long loses when price falls.

Assume an entry price of 100 USDT, quantity of 10 units, margin of 100 USDT, and maintenance margin of 0.5% of current position value. USDT is the quote asset. This teaching model excludes trading fees, funding and margin tiers, assumes no added funds or position changes, and is not any platform’s complete liquidation formula.

At entry, position value is 10 × 100 = 1,000 USDT and maintenance margin is 1,000 × 0.5% = 5 USDT. Both equity and maintenance change as price falls:

• At 95: unrealized loss is 10 × (100 − 95) = 50 USDT, leaving equity of 50. Maintenance is 10 × 95 × 0.5% = 4.75 USDT, so equity remains above the requirement.
• At 90: unrealized loss is 100 USDT and equity is zero, yet 4.5 USDT maintenance is still required. Equity therefore equals the maintenance requirement before reaching 90.

Let P denote the price at equality:

Remaining equity = 100 + 10 × (P − 100)

Maintenance margin = 10 × P × 0.5%

Equating them gives 9.95 × P = 900, hence P = 900 ÷ 9.95 ≈ 90.45 USDT. Both remaining equity and maintenance are about 4.52 USDT.

Under the same conditions, a short loses as price rises, with equity of 100 + 10 × (100 − P). Equality gives 10.05 × P = 1,100, or approximately 109.45 USDT.

The example shows that some equity remains at the maintenance threshold; liquidation need not wait until all margin is lost. Real platforms also consider fees, margin modes and risk rules. These teaching numbers are not liquidation prices for real trades.

What can change the estimated liquidation price?

Collateral equity, positions and maintenance requirements matter, not just the market price.

• Margin changes: for the single isolated position above, adding margin increases the loss buffer if entry price and quantity are unchanged; reducing margin does the opposite.
• Position changes: additions or reductions can change quantity, average entry price and the applicable margin tier, requiring recalculation.
• Fee flows: trading fees and perpetual funding payments can change collateral equity and the estimate even without a manual position adjustment.
• Maintenance changes: moving into a higher margin tier can require more collateral and change liquidation conditions.
• Other cross-margin assets and positions: cross margin shares collateral within the same scope. Other positions’ results, liabilities and asset changes affect current position risk. See margin for the modes.

When several positions and prices jointly affect risk, one price may not represent the liquidation condition at all. OKX documentation lists some multi-pair cross-margin cases in which an estimate cannot be displayed. No displayed number does not mean no liquidation risk.

Does higher leverage always bring liquidation closer?

For the same isolated position with unchanged quantity and entry price, if higher effective leverage reflects less collateral equity, the adverse-price buffer is usually smaller and the estimated liquidation price moves closer to entry.

Selected interface leverage mainly affects initial margin, the collateral needed to establish a position. Whether changing it also changes existing collateral depends on the product and action. If actual collateral and position remain unchanged, the number alone does not imply a changed liquidation price. See leverage for selected versus effective leverage.

How do estimated liquidation, bankruptcy and execution prices differ?

Estimated liquidation corresponds to equity approaching maintenance requirements. In a common simplified model, bankruptcy price corresponds to collateral equity being exhausted. Execution price is the actual price at which the position is closed.

In the long example, about 90.45 is the equality point and 90 the zero-equity point. They differ and neither guarantees execution. Platforms have specific rules for bankruptcy prices, takeover prices and handling.

Actual liquidation also considers the account state and reference price at that time, and need not occur exactly at a previously displayed estimate. See liquidation for reduction and closure after triggering.

Related terms

Explore maintenance margin, mark price and leverage, or return to the crypto glossary.

References

• OKX: Liquidation FAQ
• OKX: Futures margin calculation rules