How close it really is
Your initial margin is 1 ÷ leverage of the position — at 10× that is 10% of the notional. The exchange closes you out slightly before that margin is gone, once equity drops to the maintenance requirement. So the move you can absorb is (1 ÷ leverage) − maintenance margin, and at 10× with 0.5% maintenance that is 9.5%, not 10%.
The numbers get uncomfortable quickly. At 20× you have 4.5% of room. At 50× you have 1.5%. At 100× you have 0.5% — which Bitcoin can cover in under a minute on an ordinary day, and has covered in seconds on a bad one.
Why your exchange may say something slightly different
Three reasons, all worth knowing before you rely on any calculator including this one.
- Maintenance margin is tiered. It rises with position size — a large position on the same pair carries a higher requirement and therefore a nearer liquidation. Check your exchange's tier table rather than assuming the default.
- Cross margin changes the question. This calculator assumes isolated margin, where the position can only draw on the margin assigned to it. Under cross margin your whole balance backs the position, so liquidation is further away — until it takes the account with it.
- Funding and fees eat margin over time. On a perpetual, funding is charged every few hours. A position held for days drifts towards liquidation even if price never moves.
Questions people ask
What maintenance margin should I enter?
0.5% is a reasonable default for major pairs at moderate size on most venues. Smaller-cap perpetuals and larger positions run higher — 1% to 2.5% is common. Your exchange publishes the table; using its real number is the difference between a useful answer and a comforting one.
Does adding margin move the liquidation price?
Yes, and it is the only thing that does apart from closing part of the position. Adding margin lowers your effective leverage, which pushes liquidation further away — the same calculation with a smaller multiple.
Is a stop-loss the same protection?
No, and conflating them is expensive. A stop is your order, placed where you choose, and it can slip. Liquidation is the exchange's order, placed where its risk engine chooses, and it takes the margin. A stop should always sit well before the liquidation price — if it does not, the position is too large. The position size calculator is the tool for fixing that.