Liquidation Price
The liquidation price is the estimated market level at which a leveraged position is expected to meet the conditions for liquidation under a trading platform's margin rules. Its calculation can depend on factors such as position size, leverage, margin, maintenance requirements and the price reference used by the platform.
Why it matters to you
Liquidation price tells a trader approximately how far the market can move against a leveraged position before the platform may begin forcibly closing it. It should not be treated as a planned exit. Waiting for liquidation means allowing the exchange's risk system, rather than the trader's own risk plan, to determine when the position is closed.
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