Liquidation Price
When you open a leveraged position, the exchange holds your margin as collateral. If price moves against you, the unrealized loss eats into the margin. When the unrealized loss reaches a threshold (initial margin minus maintenance margin), the exchange liquidates: it closes your position at the prevailing market price and keeps your margin to cover the loss.
The liquidation price for a long at 10x leverage with 1% maintenance margin sits roughly 9% below entry. A 50x long has a liquidation price about 1.7% below entry. Liquidations are not punishments — they are how the exchange ensures it never takes counterparty losses itself.
Avoiding liquidation has nothing to do with hoping. It has to do with sizing positions so that your stop-loss triggers well before the liquidation price. A general rule: your stop loss should be at least 2-3× closer to your entry than your liquidation price, so that brief volatility spikes do not cascade you out of the market.
How PerpLog uses Liquidation Price
PerpLog displays liquidation distance for every open position and surfaces the nearest liquidation distance across all positions in the Active Risk widget. The pre-trade Position Sizer warns when your stop loss is closer to liquidation than is safe.
Related reading
- Position Sizing for Perpetual Futures: The Complete Guide — Blog
- Hyperliquid Trading Fees Explained: How to Minimize Costs — Blog
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