Guide · Last updated: October 13, 2026

What is liquidation?

Liquidation is when the exchange force-closes a leveraged position because its loss has eaten its margin. Most or all of the margin is lost.

How does it happen?

Every position has margin and a maintenance margin rate. When price moves against you and your margin approaches the maintenance level, the exchange closes the position. The higher the leverage, the closer the liquidation price is to your entry.

How is the liquidation price estimated?

With isolated margin and an assumed maintenance rate of about 0.5%, for a long it is roughly: entry × (1 − 1/leverage + 0.005). For a 10x long entered at 100 it is about 90.5. The real value depends on contract, size and fees; the exchange's own calculator is authoritative.

Why do mass liquidations matter?

When many leveraged positions are liquidated in the same price zone, the forced closing orders can sharpen the move in its direction. KARDVANE flags 'liquidation' when open interest drops quickly while price moves the same way; that is a measurement of something that has happened, not a forecast.

Example

You opened a 10x long with 100 USDT margin (a 1,000 USDT position). If price falls about 9.5% the position is liquidated and you lose the whole 100 USDT margin; with a stop you would normally exit before that.

Where do you see it in KARDVANE?

The Pro terminal shows the live liquidation feed and the estimated distance to liquidation for each position; Trader Coach checks whether your stop sits before the liquidation price.

FAQ

Do I lose everything when liquidated?

With isolated margin you lose the margin assigned to the position; with cross margin the rest of your account is also at risk, which is why margin type matters.

Does a stop prevent liquidation?

A stop prevents it if it triggers before liquidation; execution is not guaranteed during slippage or sudden moves.

This page is educational; it is not investment advice.