Work it out
The starting values are an illustration, not a suggested trade or allocation.
Your inputs are not sent to a server or stored by this calculator.
Worked example
Two units at 1000 give 2000 notional and 4× relative to 500 equity. A−5% price move gives−100 P/L, or−20% of the reference equity.
Notional measures price exposure
For the linear model here, notional equals underlying units multiplied by reference price. It is different from the cash posted as margin or a fee charged for holding the position.
If you start with contracts, convert them to units using the product’s multiplier. One contract does not represent the same exposure across different instruments.
Define the equity denominator
The displayed ratio divides notional by the equity you enter. If you enter the whole account equity it is an account-relative measure for this position; if you enter allocated margin it is an allocation-relative measure.
Those two denominators are not interchangeable. The result is not an exchange-confirmed leverage setting or a complete measure of portfolio risk.
Translate a price move into linear P/L
A long scenario earns notional ×price-change fraction; a short uses the opposite sign. Dividing by reference equity shows the same arithmetic result as a fraction of that denominator.
The tool holds quantity fixed and treats the reference price as the starting point. It does not simulate an entry, rebalance the position or resize after gains and losses.
Why no liquidation price appears
Actual liquidation can depend on maintenance margin tiers, mark price, collateral, cross-margin rules, funding and other positions. Those facts are not present in these inputs.
The calculator therefore reports no liquidation threshold. If arithmetic equity becomes negative, that is displayed as a scenario result, not a claim that the venue would leave the position open that long.
Use sensitivity rather than a safety label
Run different price moves with the same exposure and denominator to understand proportional effects. A small scenario is not a bound on what a volatile market can do.
Hedges, options and inverse contracts may behave differently from this linear model. Keep costs and other exposures in a separate risk record before interpreting the result.
What this tool does not calculate
- No liquidation calculation, margin-tier model or portfolio netting.
- Linear underlying units only; fees, funding and taxes excluded.
Common questions
Is the ratio the leverage shown by my exchange?
Not necessarily. It is only notional divided by the equity denominator you supplied.
Why not calculate liquidation as one divided by leverage?
That shortcut omits maintenance margin and platform rules. This tool does not have the inputs needed to give a defensible liquidation price.
Why can the output show negative equity?
The linear scenario is not stopped at a liquidation event. Negative arithmetic equity exposes the model’s limits instead of silently clipping the loss.
Sources & method
An original calculation tool built with AI assistance. Its method and limits are documented here, and calculation examples are checked with automated tests.
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