# Binance futures liquidation: how it works and how to avoid it

> Binance futures liquidation starts when your margin can no longer support a position. Learn what triggers it, how margin modes change risk and what to check.

**Short answer:** Binance futures liquidation is the forced closing of a futures position when your margin balance falls below the maintenance margin required to keep it open. Binance checks the Mark Price, not just the last traded price on the chart. You can reduce the chance of liquidation by using less leverage, sizing the position around the amount you can lose, and making sure your planned stop is reached before your liquidation price.

## What does liquidation mean in crypto futures?

Liquidation means the exchange begins closing your leveraged position because the funds supporting it are too low to meet the maintenance margin, the minimum margin required to keep a position open. On Binance USDⓈ-M Futures, this starts when the Mark Price reaches your liquidation price ([Binance Futures Liquidation Protocols](https://www.binance.com/en/support/faq/detail/360033525271)).

The liquidation price is a trigger, not necessarily the price your position finally closes at. Binance cancels open orders and first tries to reduce the position with one large Immediate or Cancel order. Any part of that order that doesn’t fill becomes a bankrupt position, which is closed at the bankruptcy price, where the margin balance has reached zero ([Binance Futures Liquidation Protocols](https://www.binance.com/en/support/faq/detail/360033525271); [Binance, 2025](https://www.binance.com/en/blog/futures/3319141945917512624)).

## Binance futures liquidation price: a useful estimate

A quick estimate for an isolated long is: **approximate adverse price move ≈ 1 ÷ leverage − maintenance margin rate**. Binance’s maintenance margin depends on the position’s notional value and its risk tier, while the exact liquidation calculation also depends on margin balance, maintenance amount, and other account details ([Binance leverage and margin rules](https://www.binance.com/en/support/faq/detail/360033162192); [Binance liquidation-price formula](https://www.binance.com/en-IN/support/faq/detail/b3c689c1f50a44cabb3a84e663b81d93)).

The table below is an illustrative estimate using a 0.40% maintenance margin rate, the BTCUSDT rate for positions up to 50,000 USDT notional in Binance’s May 2024 tier update ([Binance, 2024](https://www.binance.com/en/support/announcement/detail/aa735cd2d8bd4e7bb092179cf086e486)). Larger positions fall into higher tiers with higher rates ([Binance, 2026](https://www.binance.com/en/support/faq/detail/360033162192)). It assumes one isolated position, no other balance changes and no funding or fees. Binance’s margin tiers can change, so check the current BTCUSDT tier and use Binance’s Futures calculator before trading. The estimate tells you roughly how far price can move against the position; it isn’t a substitute for the displayed liquidation price.

| Leverage | Approximate move against an isolated position |
| -------- | --------------------------------------------: |
| 2x       |                                        49.60% |
| 3x       |                                        32.93% |
| 5x       |                                        19.60% |
| 10x      |                                         9.60% |
| 20x      |                                         4.60% |
| 50x      |                                         1.60% |

For example, at 10x the initial margin is about one tenth of the position’s notional value. A loss of roughly 9.6% of that notional would use up the initial margin less the estimated maintenance requirement. The real liquidation price can differ because maintenance margin uses tiered rates and deductions, and your balance can change with funding, fees, margin adjustments and other positions. Binance’s [liquidation-price guide](https://www.binance.com/en-IN/support/faq/detail/b3c689c1f50a44cabb3a84e663b81d93) explains the full inputs; its [Futures calculator](https://www.binance.com/en/futures/btcusdt/calculator) provides a position-specific estimate.

## Cross margin vs isolated margin: what can you lose?

**Isolated margin** assigns a chosen amount of margin to one position. **Cross margin** shares the available balance in your futures wallet across cross positions. Binance’s liquidation formula uses that shared wallet balance and accounts for the maintenance margin and unrealized profit or loss of other contracts ([Binance liquidation-price guide](https://www.binance.com/en-IN/support/faq/detail/b3c689c1f50a44cabb3a84e663b81d93); [Binance, 2022](https://www.binance.com/en/blog/futures/5845477141003990750)).

Consider an illustrative futures wallet with 1,000 USDT and a 5,000 USDT position. If the position loses 20% of its notional value, the loss is 1,000 USDT. If you had assigned only 250 USDT as isolated margin, a 5% loss on the same notional would use that 250 USDT. These are simple loss calculations, not liquidation prices: maintenance margin, fees and funding mean Binance may start liquidation before either amount is reached. In cross mode, losses can draw on the shared wallet; in isolated mode, they affect the margin assigned to that position unless you add more.

Use isolated margin when you want to keep one position’s margin separate from your other positions. Cross margin can fit a deliberately managed group of positions whose gains and losses you intend to offset against shared collateral. Avoid cross margin if you don’t want a losing position to consume funds supporting other positions. Neither mode removes the risk of losing money.

## Why was I liquidated before the chart reached my liquidation price?

Check whether the chart showed Last Price or Mark Price. Binance uses Mark Price to trigger liquidation; Last Price is the latest trade on the futures contract. The two prices can differ, so a candle or alert based on Last Price may not show the threshold being reached ([Binance Futures Liquidation Protocols](https://www.binance.com/en/support/faq/detail/360033525271); [Binance Mark Price guide](https://www.binance.com/en-AE/support/faq/detail/360033525071)).

There can also be a difference between the displayed liquidation price and the actual liquidation price recorded in history. Binance says Mark Price can move sharply in volatile conditions, passing the displayed level between updates. Funding payments, changes to margin or position size, and changes to maintenance-margin tier can also move the liquidation price ([Binance Futures Liquidation Protocols](https://www.binance.com/en/support/faq/detail/360033525271); [Binance, 2022](https://www.binance.com/en/blog/futures/5845477141003990750)).

To review a liquidation, compare the Mark Price at the time with your position’s liquidation price and check your futures transaction history for funding, margin changes and the liquidation clearance entry. A stop-market order can fill at a different price, while a stop-limit order may not fill at all; Binance says stop orders aren’t a foolproof defense against liquidation ([Binance stop orders, 2023](https://www.binance.com/en/blog/futures/2094497753519691034)). Leave room between your stop and liquidation level.

## What happens after Binance liquidates a position?

Binance cancels open orders and attempts to reduce the position first. Any part of that reduction order that doesn’t fill becomes a bankrupt position, which is closed at the bankruptcy price; the Insurance Fund bears losses from it to the extent possible. Binance’s liquidation FAQ adds that part of the position’s margin is “deducted and paid to Binance as a Liquidation Clearance Fee” ([Binance Futures Liquidation Protocols](https://www.binance.com/en/support/faq/detail/360033525271)).

Auto-deleveraging (ADL) is a later step. It can close part of a profitable trader’s position if the Insurance Fund can’t take over a bankrupt position. Binance describes ADL as the final step and says positions with higher profit and leverage rank earlier in its queue ([Binance ADL guide](https://www.binance.com/en-AE/support/faq/detail/360033525471)). The fund and ADL process don’t protect a trader from losing their margin.

## A pre-trade liquidation checklist

1. **Choose the amount you can lose first.** Then use a [position-size calculation](/blog/crypto-position-size) to set the notional size. Leverage changes the margin required; it doesn’t make the planned loss smaller by itself.
2. **Check the mode and collateral.** Confirm whether the position is Cross or Isolated and, for Cross, identify which other positions share the wallet.
3. **Check the Mark Price and liquidation price.** Use Binance’s liquidation price calculator and confirm the position’s current risk tier. Recheck after adding or removing margin, changing position size, or paying funding.
4. **Set the stop before liquidation.** Place your planned exit where your trade idea is invalidated, with room before the liquidation level. Review how [stop-market and stop-limit orders differ](/blog/stop-loss-vs-stop-limit); neither guarantees a fill at the trigger during a fast move.
5. **Review costs and market conditions.** Include trading fees and funding in your plan. A [maker or taker fee](/blog/maker-vs-taker-fees) and a volatile move can change the result you receive.

Binance’s FAQ recommends a stop trigger at least 1% away from liquidation, using Mark Price as the trigger. For a long with a stop at 95, the liquidation price should be 94.05 or lower to leave 1% above it. For a short with a stop at 105, liquidation should be 106.07 or higher to leave 1% below it. Treat this as a minimum reference, not a guarantee: the liquidation price can move and an order can fill differently from its trigger ([Binance FAQ, n.d.](https://www.binance.com/en/support/faq/detail/d82ce5274e974806a5842d1a109787b8)). If your trade plan needs more room, reduce the position or don’t open it. Don’t treat the displayed liquidation price as a stop-loss.

If you’d rather not manage futures positions yourself, we run Cointrapper, a private trading pool on Binance; participants invest USDT in the pool’s accounts and don’t need their own futures account or API keys ([how the pool works](/blog/introducing-cointrapper)).

Futures trading is high risk and you can lose your entire investment. Past performance does not guarantee future results, and nothing here is individual investment advice.