Liquidation price: maintenance margin, mark price and limits
Understand the liquidation threshold and why an estimate cannot guarantee the price or result of a forced close.
Liquidation is a maintenance threshold
A venue can initiate liquidation when position or account equity no longer satisfies its maintenance requirement. It need not wait for all initial margin to disappear. Liquidation and bankruptcy price are different concepts. Partial liquidation, position reduction and account-level procedures vary by product and venue.
Which price is compared
Many derivatives venues use mark price for liquidation while a visible chart may show last traded price. A stop may use another reference. A last-price stop can therefore remain untriggered while the liquidation condition is reached on the mark. The actual execution price is a further separate observation.
What an estimate needs
Relevant inputs can include quantity, entry, collateral, maintenance tiers, margin mode, closing fees, funding and other positions. Cross or portfolio margin cannot generally be reduced to one isolated-position equation. Collateral changes and new orders can alter account headroom without a change in the selected contract’s last price.
An explicitly simplified example
At $100 entry and 10×, ignoring maintenance and costs gives a rough full-margin-loss intuition near $90 for a linear long. It is not an exact liquidation threshold. Positive maintenance requirements can cause earlier liquidation, and fees or the reference price can further change the boundary. A short has a different price direction and contract formulas can differ.
Stop-loss is a different mechanism
A stop requests an exit after a trigger; it does not guarantee execution at that trigger or before liquidation. Stop-limit can remain unfilled, and stop-market can slip. Adding margin may shift a boundary but increases assets exposed and cannot be assumed available automatically. None of these mechanisms ensures that liquidation is impossible.
Using TradingHub responsibly
The calculator provides an approximate isolated-margin scenario under its displayed assumptions, not your exchange’s confirmed threshold or a complete account-risk assessment. Compare the venue’s current position screen, reference price, tier and fees. Use the margin-mode and advanced-order guides for the surrounding mechanics; no position or mitigation is selected for you.
Practical scenario
Calculate initial margin ($) = notional / leverage. Costs and maintenance are excluded.
Changing leverage at constant quantity changes collateral, not gross price PnL.
Interactive checking needs JavaScript; the lesson and explanation remain readable.
Knowledge check
Must all initial margin be gone before liquidation?
- Yes, on every contract
- No; maintenance requirements can trigger it earlier
- Only the last traded price matters
Show explanation
Maintenance, reference price, contract and account rules determine the threshold.
Interactive checking needs JavaScript; the lesson and explanation remain readable.
Primary sources and scope
Educational scenarios are not execution guarantees, forecasts or personal recommendations. Check current product rules at their source.
- www.bybit.com/en/help-center/article/Initial-Margin-USDT-Contract
- www.bybit.com/en/help-center/article/FAQ-Order-Execution-and-Liquidation
Content revised: . Editorial responsibility: TradingHub. No independent professional certification is claimed.