What is the liquidation price in Binance Futures?

Binance uses the mark price—not the last traded price—to trigger liquidations, preventing manipulation and ensuring fair exits based on market conditions.

Jul 29, 2025 at 02:43 pm

Understanding Liquidation Price in Binance Futures

The liquidation price in Binance Futures is the specific price at which your leveraged position will be automatically closed by the exchange to prevent further losses. This mechanism protects both traders and Binance from negative balances due to extreme market movements. When your position's unrealized loss reaches a level where your margin balance can no longer cover potential losses, liquidation occurs. The exact liquidation price depends on your leverage, entry price, position size, and maintenance margin rate.

How Binance Calculates Liquidation Price

Binance uses a formula based on your position's risk parameters. For a long position, the liquidation price is calculated as:

Liquidation Price = Entry Price × (1 - Maintenance Margin Rate) / (Leverage - Maintenance Margin Rate)

For a short position, the formula changes slightly:

Liquidation Price = Entry Price × (1 + Maintenance Margin Rate) / (Leverage + Maintenance Margin Rate)

These formulas assume isolated margin mode. In cross-margin mode, the system uses your total available balance across all positions to determine when liquidation might occur, making the calculation more dynamic. You can view your liquidation price directly in the Binance Futures interface under the "Positions" tab—no manual calculation needed unless you're building a risk model.

Step-by-Step: How to Check Liquidation Price on Binance

• Open the Binance app or website and navigate to the Futures trading interface
• Select either USDT-Margined or COIN-Margined contracts
• Open the "Positions" section at the bottom of the trading panel
• Locate your active position—each will display a "Liquidation Price" field in red
• Hover over or click the info icon (i) next to the field to see how it’s calculated based on your current settings
  

  This real-time display updates as the market moves or if you adjust your leverage or position size. If your position is in danger—meaning the mark price is approaching your liquidation price—you’ll see a warning indicator.

  Difference Between Mark Price and Last Traded Price in Liquidation

  
  Binance uses the mark price, not the last traded price, to trigger liquidations. The mark price is a fair value estimate based on the underlying index price and funding rates. This prevents liquidations during sudden, manipulative price spikes. If liquidation used the last traded price, whales could "pump and dump" to trigger mass liquidations. The mark price acts as a stabilizer, ensuring liquidations happen only when the broader market justifies it.
  

  How to Avoid Liquidation on Binance Futures

• Reduce leverage: Lower leverage (e.g., 5x instead of 50x) significantly increases your liquidation buffer
• Add margin manually: In isolated mode, click "Add Margin" to increase your position’s collateral
• Use stop-loss orders: Set a stop-loss below your entry (for longs) or above (for shorts) to exit before liquidation
• Switch to cross-margin: This spreads your risk across all positions, using your total balance as a safety net
• Monitor funding rates: High funding costs can erode your margin over time—close positions before funding events if necessary
  

  Each of these steps must be done while your position is still open and not in liquidation danger. Once the mark price hits your liquidation level, the system will auto-close the trade—no manual intervention possible.

  Frequently Asked Questions

  Can my liquidation price change after opening a position?
  
  Yes. If you modify your leverage or add/remove margin in isolated mode, your liquidation price will update instantly. In cross-margin mode, it changes as your total account balance fluctuates due to other open positions.

  Why did my position get liquidated even though the chart didn’t reach my liquidation price?
  
  Because Binance uses the mark price, not the chart’s last price. If the mark price (which reflects fair value) hits your liquidation level—even if the last traded price hasn’t—the system will liquidate.

  Is there a way to see liquidation price for a hypothetical position before entering?
  
  Yes. In the order entry panel, after setting your leverage and position size, Binance displays a preview of your liquidation price below the order form—this appears before you confirm the trade.

  What happens to my funds after liquidation?
  
  Binance closes your position at the liquidation price and returns any remaining margin to your wallet. If the position was deeply underwater, you may receive less than your initial margin due to fees and slippage during the forced close.