01
How liquidation price is calculated
Liquidation price is the price at which margin falls below the maintenance level and the position is force-closed. Under a simplified isolated-margin model: long liquidation β entry Γ (1 β 1/leverage + MMR), short β entry Γ (1 + 1/leverage β MMR). E.g. a 50,000 long at 10x leverage with 0.5% MMR liquidates around 45,250 β roughly a 9.5% drop.