What leverage really costs you in risk
Leverage is often sold as a way to 'amplify gains', but the more useful framing is risk. The single most important number is how far the price can move against you before liquidation — which is roughly 100% ÷ leverage. At 5x that is a 20% buffer; at 25x it shrinks to 4%; at 100x a 1% wobble ends the trade. This calculator puts that buffer front and centre so you can pick leverage based on the volatility you expect, not on the size of the position you wish you had.
Position sizing the professional way
Pros size positions by risk, not by leverage. The rule of thumb is to risk only 1–2% of your account on any single trade. To apply it, decide where your stop-loss sits, work out the loss if it is hit, and choose a position size so that loss equals 1–2% of your capital. This calculator's position-size and liquidation outputs let you reverse-engineer a safe size for any leverage and entry combination.
Isolated vs cross margin
Isolated margin caps your risk on a single position to the margin you assigned it — if it liquidates, the rest of your account is untouched. Cross margin shares your whole balance as collateral, which delays liquidation but puts everything at risk. The liquidation price here assumes isolated margin. If you trade cross, your effective liquidation sits further away but a single bad trade can drain the entire account.
Choosing a leverage level
Match leverage to the asset's volatility and your stop distance. Bitcoin can swing 5% in a day, so anything above 10x leaves little room. Smaller altcoins move far more and demand even lower leverage. When in doubt, drop the multiplier — survival compounds, liquidation does not. Crypto exchanges differ on maker/taker fees, funding rates and maintenance-margin tiers, and tax rules vary by country. Treat these results as a planning baseline and confirm against your exchange statements and a qualified tax professional before acting.
Frequently asked questions
How do I calculate liquidation price?
For a long, liquidation is approximately entry × (1 − 1/leverage); for a short, entry × (1 + 1/leverage). This excludes maintenance margin, so your exchange's level is slightly tighter.
What leverage is safe for crypto?
Most experienced traders stay at or below 3–5x. Lower leverage gives a wider buffer before liquidation and survives normal volatility.
How much margin do I need?
Required margin equals position size ÷ leverage. To open a $12,000 position at 15x you need $800 of margin.
What is the move-to-liquidation percentage?
It is roughly 100% ÷ leverage — the adverse price move that erases your margin. At 20x leverage a 5% move against you triggers liquidation.