Liquidation Price — Trading Wiki

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Published by TradeHQ. Site creator: Anuga Weerasinghe. This page has no recorded editorial review date; the About page explains the site's editorial approach.

What Liquidation Price means

A liquidation price is an estimate of the level at which a leveraged position may be closed under a platform's margin rules. Collateral, fees, other positions and the pricing method can change that estimate.

In depth

A liquidation price is a venue-calculated threshold used in managing a collateralized position. It is not necessarily an executable price or the price that consumes every dollar of equity. Maintenance requirements, other positions, eligible collateral, fees, funding and mark-price rules affect the threshold. Actual closing orders may execute differently during a gap or liquidity shortage. Isolated and cross-margin arrangements allocate eligible collateral differently; neither label establishes a universal cap on losses or account obligations. Consult a specific contract and venue rules for an actual calculation.

TradeHQ’s unleveraged spot simulation has no liquidation-price engine.

Key points

• Higher leverage brings the liquidation price closer to entry
• Isolated-margin treatment depends on the platform rules; it is not a universal loss guarantee
• Mark price vs last price affects when liquidation triggers

Why it matters when you are learning

Compare the inputs in a venue’s documented estimate rather than treating one displayed price as fixed. Margin requirements and other positions can change the result.

Worked exercise and its limits

Distinguish a simplified collateral-loss calculation from an actual venue liquidation price. Fees, maintenance tiers, mark prices and collateral mode affect the latter. No single entry-price/leverage formula establishes a universal guaranteed exit, and TradeHQ does not model liquidation.