Margin Calculator
Calculate required margin, liquidation price, and P&L scenarios for leveraged positions. Supports long and short trades at any leverage level.
Margin Calculator
Calculate required margin, liquidation price, and P&L scenarios for leveraged positions. Supports long and short trades at any leverage level.
How Margin Trading Works
Margin trading lets you control a larger position than your capital would normally allow by borrowing from the exchange. With 10x leverage, you deposit $1,000 (your margin) to control a $10,000 position. Gains and losses are amplified by the leverage factor — a 5% price move becomes a 50% return on your margin.
Required Margin = Position Value ÷ Leverage
Liquidation (Long) = Entry × (1 − 1/Leverage + Maintenance%/100)
Liquidation (Short) = Entry × (1 + 1/Leverage − Maintenance%/100)
Understanding Liquidation Price
Your liquidation price is the price level at which your margin balance drops to zero and the exchange automatically closes your position. Higher leverage means the liquidation price is closer to your entry, giving you less room for adverse price movement. A 100x leveraged long position can be liquidated by just a ~1% drop. Always know your liquidation price before entering a leveraged trade and consider setting a stop-loss well before it.
Risk Management for Leveraged Trading
Leverage amplifies both profits and losses. The most common mistakes in margin trading are using too much leverage, ignoring liquidation price, and failing to set stop losses. Professional traders rarely use more than 3-5x leverage on any single position. If you're new to margin trading, start with low leverage (2-3x), use only a small portion of your capital, and always have a clear exit plan. Remember: it's possible to lose your entire margin deposit in seconds during volatile markets.
Disclaimer: This calculator is for educational and informational purposes only. It is not financial advice. Leveraged trading carries substantial risk of rapid losses. Always consult a qualified financial professional before trading on margin.
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Common Use Cases
Margin trading allows you to control a larger position than your account balance would normally allow by borrowing funds from your broker or exchange. While this amplifies potential profits, it equally amplifies potential losses — and introduces the critical concept of liquidation, where your position is forcibly closed if losses exceed your margin.
Understanding your liquidation price before entering a leveraged trade is not optional — it is essential for survival. Many traders have been liquidated because they did not account for how close their liquidation price was to current market volatility. This calculator shows exactly where your position gets liquidated and how P&L changes at different price levels.
- Liquidation risk: Know your exact liquidation price before entering any leveraged position
- Leverage comparison: Compare how different leverage levels affect your risk and potential returns
- Margin requirements: Calculate how much capital you need to open a specific position
- Short selling analysis: Evaluate margin requirements and liquidation risks for short positions
How Margin Trading Works
Margin trading lets you control a larger position than your capital would normally allow by borrowing from the exchange. With 10x leverage, you deposit $1,000 (your margin) to control a $10,000 position. Gains and losses are amplified by the leverage factor — a 5% price move becomes a 50% return on your margin.
Understanding Liquidation Price
Your liquidation price is the price level at which your margin balance drops to zero and the exchange automatically closes your position. Higher leverage means the liquidation price is closer to your entry, giving you less room for adverse price movement. A 100x leveraged long position can be liquidated by just a ~1% drop. Always know your liquidation price before entering a leveraged trade and consider setting a stop-loss well before it.
Risk Management for Leveraged Trading
Leverage amplifies both profits and losses. The most common mistakes in margin trading are using too much leverage, ignoring liquidation price, and failing to set stop losses. Professional traders rarely use more than 3-5x leverage on any single position. If you're new to margin trading, start with low leverage (2-3x), use only a small portion of your capital, and always have a clear exit plan. Remember: it's possible to lose your entire margin deposit in seconds during volatile markets.
Disclaimer: This calculator is for educational and informational purposes only. It is not financial advice. Leveraged trading carries substantial risk of rapid losses. Always consult a qualified financial professional before trading on margin.