Liquidation Buffer: A Worked Crypto Example With Fees Included
The distance between your stop and your liquidation price is a safety buffer. Too little, and a fast move liquidates you before the stop fills.
Short answer
Liquidation buffer = distance from stop to liquidation price. With isolated margin, a simplified approximation for a long is liquidation ≈ entry × (1 − 1/leverage + maintenance margin rate); exchanges use their own formulas (Bybit documents mark-price-based liquidation by margin mode). Example: entry $60,000, stop $58,800, maintenance rate 0.5%: at 10×, liquidation ≈ $54,300 (buffer $4,500); at 25×, ≈ $57,900 (buffer $900). A buffer of only $900 can be crossed by mark-price moves and stop slippage in fast markets.
Worked example
| Step | Value |
|---|---|
| Entry | $60,000 |
| Stop | $58,800 |
| Liq. at 10× (approx.) | ≈ $54,300 |
| Buffer at 10× | ≈ $4,500 |
| Liq. at 25× (approx.) | ≈ $57,900 |
| Buffer at 25× | ≈ $900 |
Sizing the buffer
Make the buffer larger than the worst stop slippage plus the largest mark-vs-last gap you have observed. If your stop slipped $300 in past fast markets and mark deviated $400, a $900 buffer is thin.
Conclusion
Related: Mark Price vs Last Price: Why Liquidation Can Surprise You, Stop-Loss Trigger vs Fill Price: Plan for Slippage in Fast Markets.
Plan the same calculation with ChartsPod's position planner.
Open the ChartsPod terminalLiquidation buffer = distance from stop to liquidation price.
Test Liquidation Buffer on a perpetual chart; no account is needed to chart.
Launch ChartsPodQuestions readers ask
What is a liquidation buffer?
Distance between stop and liquidation price.
How big should it be?
Larger than worst observed slippage plus mark-price deviation.
Is the formula exact?
No; use the exchange's figure.
Sources and methodology
Arithmetic uses standard sizing formulas. Fee rates (0.05% taker, 0.02% maker), slippage and funding values are illustrative; check your venue's schedule. Liquidation figures are simplified approximations; exchanges calculate them with their own maintenance-margin rules (see Bybit's documentation).
- Bybit: Liquidation process — mark price and margin modes.
- ChartsPod: product overview, pricing and FAQ — free terminal, venues, modules, no order placement; checked 17 Oct 2026.
This article explains research tools and workflows. It is not financial advice, does not recommend buying or selling any asset and does not predict prices. Crypto derivatives carry a risk of rapid and total loss of margin.
CHARTSPOD EDITORIAL EDITION · RESEARCH AND EDUCATION ONLY · NOT FINANCIAL ADVICE.