How is distance to liquidation calculated?

The absolute difference between the liquidation price and the current price, divided by the current price.

Guides and reference · Distance to liquidation

Guide 03 of 091 min read

Distance to liquidation

The single number that decides how fragile a leveraged position is, and how the radar draws it.

Distance to liquidation is how far the price has to move, in percent, before a position is closed by force. A long with a liquidation price 3% below the market is 3% from being liquidated. A short with a liquidation price 12% above the market has more room.

0%10%20%a long, 3% awaya short, 12% away

The same track every page uses. The long would be liquidated by a 3% fall, the short by a 12% rise.

Why it matters more than leverage

Leverage alone does not tell you how close a position is to the edge. Cross-margined positions share collateral, so two positions with the same leverage can sit at very different distances. The liquidation price already accounts for that.

How the radar uses it

Distance to liquidation is the radius on the radar. The closer a dot is to the centre, the smaller the move that liquidates it. When people say a whale is “4% from liquidation”, this is the number they mean.