Futures – Leverage and Liquidation

One wrong idea that new users have is that they assume that as leverage increase, the liquidation percentage move linearly, which is not the case. This next table is what they assume the behavior would be

LeverageLiquidation % before leverage
1-100%
2-50%
5-20%
10-10%
20-5%
50-2%

But in reality, this is what gonna happen. Assume entry price of 28000, quantity of 0.001 BTC, isolated mode, and one-way mode, the values below are calculated using Binance calculator

LeverageBalance (USDT)Liq Price (USDT)Real price % change% difference with table above
128 0-100%
21414056.22-49.8 %0.4%
55.622489.96-19.68%1.61%
102.825301.20-9.63%3.61%
201.426706.83-4.62%7.63%
500.5627550.20-1.6%19.68%
Long trades simulation

Please note that this is just a simulation, and real-time liquidation price may differ based of your the pair, available balance and other factors, and might differ on different exchanges.

So when your trade liquidated before your theoritical level, don’t be shocked.

One comment

Leave a Reply

Your email address will not be published. Required fields are marked *