How to Use Crypto/ Binance Futures Profit & Liquidation Calculator
Step 1: Enter Your Cost/Margin
- Input your cost or margin in the designated field. For example, if you have 7,500 USDT in your USDⓈ-M Futures wallet and wish to open a position at 6,500 USDT, enter "6,500".
- As for Crypto Futures Calculator, if you are trading the BTCUSD coin-margined contract and intend to open a position with 0.085 BTC, enter "0.085".
Step 2: Choose Your Position Type
- Select whether you are opening a long or short position based on your trading strategy.
Step 3: Select Your Margin Mode
- Choose between Cross Margin or Isolated Margin depending on how you want to manage your margin.
Step 4: Enter Your Leverage
- Specify your desired leverage ratio. For example, for 8x leverage, input "8".
Step 5: Enter Your Wallet Balance (Optional)
- If you are using Cross Margin mode, input your USDⓈ-M or COIN-M Futures wallet balance. With a wallet balance of 20,000 USDT, enter "20000". If you are in Isolated Margin mode, you can leave this blank.
Step 6: Enter Your Entry Price
- Specify the price at which you plan to enter the trade.
Step 7: Enter Your Exit Price (Optional)
- Input your exit price. Leaving this blank will result in the calculator disregarding any negative PNL calculations.
Step 8: Select the Maintenance Margin Rate and Enter the Amount
- Choose your maintenance margin rate and input the required maintenance amount. These values will depend on the trading pair and your position size. For instance, if trading the ETHUSDT (perpetual) contract with an 8,000 USDT position, you might select 0.05% as your maintenance margin rate and enter 0 as your maintenance amount. If uncertain about your position size, calculate it by multiplying your cost (margin) by your leverage or by multiplying your position size in crypto by your entry price.
Step 9: Click the "Calculate" Button
- After entering all necessary details, click the "Calculate" button. Note that the liquidation price may vary slightly from the calculated one due to different maintenance margin rates, which can change based on your position size and the trading pair. To enhance accuracy, ensure you find your maintenance margin rate and amount based on your specific trading pair and position size before entering them into the calculator.
Crypto Futures Calculator
What would my liquidated price have been if I made a
Accuracy of Liquidation Price
For a more accurate liquidation price, it's recommended to refer to the official
Binance Futures webpage linked within the calculator. This page allows you to select your specific trading pair and position size to find the corresponding maintenance margin rate and calculate a more precise liquidation price.
By understanding these limitations and utilizing the provided resources, you can better understand your risk exposure and make informed trading decisions on the
Binance Futures platform.
Calculating Liquidation Price After Margin Adjustments
In calculating the liquidation price after adjusting your margin, you need to account for the change in leverage.
For instance, if you have a position of 14,000 USDT at 2× leverage, your margin is:
$$\text{Margin} = \frac{\text{Position}}{\text{Leverage}} = \frac{14,000}{2} = 7,000 \, \text{USDT}$$
If you add 1,000 USDT to your margin, your actual leverage shifts from 2× to 1.75×:
$$\text{New Leverage} = \frac{14,000}{7,000 + 1,000} = \frac{14,000}{8,000} = 1.75 $$
Hence, you should enter "1.75" instead of "2" in the leverage field. Entering "2" and "8,000" in the leverage and cost/margin fields, respectively, would inaccurately calculate your position size as:
$$\text{Calculated Position Size} = \text{Cost/Margin} \times \text{Leverage} = 8,000 \times 2 = 16,000 \, \text{USDT} $$
Even though your position size remains unchanged when you adjust the margin. Remember, your entry price stays the same when you adjust your margin. Thus, calculating the liquidation price after margin adjustment only reflects your margin and leverage changes.
When determining your position size, multiply your position size (in coins) by your entry price. If you're trading coin-margined futures contracts, the formula is:
$$\text{Position Size (in USD)} = \text{Size of Contract} \times \text{Value of One Contract in USD}$$
Calculating Liquidation Price After Increasing Position Size
Suppose you have a long position leveraged at 3×3\times3× with the following values:
- Margin: 400 USDT
- Entry Price: 25,000 USDT
- Position Size: 1,200 USDT1
You plan to place a new buy/long order with an additional 200 USDT(margin) at 3× leverage, priced at 22,000 USDT.
1. Compute the New Entry Price:
To calculate the new entry price, use the formula:
$$\text{New Entry Price} = \frac{(25,000 \times 1,200) + (22,000 \times 600)}{1,800} = 24,000 \, \text{USDT}$$
-
Explanation: Here, you add the product of your current position's entry price and size to that of your new order, then divide by the total position size.
2. New Liquidation Price Calculation: With the updated values:
- Margin: 600 USDT (calculated as 400+200)
- Entry Price: 24,000 USDT
- Position Size: 3×
3. Changing Leverage:
If you decide to place the new buy/long order using 4×4\times4× leverage, you need to recalculate the new entry price:
$$\text{New Entry Price} = \frac{(25,000 \times 1,200) + (22,000 \times 800)}{2,000} = 23,800 \, \text{USDT}$$
4. Calculate Real Leverage:
The real leverage falls between 3× and 4× and requires calculating the initial and new order sizes in coins:
- Initial Position Size in Coins:
$$\text{Initial Size} = \frac{1,200}{25,000} = 0.048 \, \text{BTC}$$
- New Order Size in Coins:
$$\text{New Size} = \frac{800}{22,000} \approx 0.03636 \, \text{BTC}$$
- Total Position Size in Coins:
$$\text{Total Size} = 0.048 + 0.03636 \approx 0.08436 \, \text{BTC}$$
5. Calculate Real Leverage:
The real leverage can be calculated by:
$$\text{Real Leverage} = \frac{(0.08436 \times 23,800)}{600} \approx 3.34628$$
6. Final Liquidation Price Calculation:
With the updated values:
- Margin: 600 USDT (calculated as 400+200)
- Entry Price: 23,800 USDT
- Position Size: 3.34628×
What Is Margin in Futures Trading
In futures trading, margin means funds deposited by the trader, necessary for opening and maintaining a leveraged position. The margin is the security deposit that assures the trader will cover his losses.
There are two main types of margins:
Initial Margin: The initial margin is the amount required to initiate a new futures position, and the size is governed by the contract and trading platform with deeper consideration of the risks associated with the base instrument.
Maintenance Margin: This is a minimum quantity that a margin account must hold in order for a position to be open. The trader will be on margin call if, upon his losses, the account balance lowers below this level, meaning he has to deposit more funds or close the position.
Example:
Suppose you want to trade Bitcoin BTC Futures on Binance. You open a position valued at $10,000. To open such a position, you need an initial margin of 10%, or $1,000, as margin to open the position. Now, if the price of Bitcoin moves against you and your position loses $800, your remaining margin will be $200.
Since this is above the maintenance margin, let's say it's $100, then your position will stay open. If the net account value falls below $100, you will get a margin call and you may be required to deposit more money into your account in order to avoid liquidation.
The Differences Between Cross Margin and Isolated Margin
| Feature |
Cross Margin |
Isolated Margin |
| Definition |
Use the entire balance in your margin account as collateral for all positions. |
| Pros |
- Reduces the likelihood of liquidation by utilizing the entire balance.
- Useful for maintaining multiple positions simultaneously and optimizing margin.
|
- Better control over risk with losses limited to the isolated margin amount.
- Ideal for managing risk on a position-by-position basis.
|
| Cons |
- If the account balance declines significantly, all positions may face liquidation.
- Entire balance is at risk.
|
May face liquidation sooner if the market moves against you, as only the allocated funds cover losses.
|
Example:
Let’s say you have a Binance Futures account with a total balance of $5,000. You decide to open two positions:
- Cross Margin You open a long position for Bitcoin worth $3,000 and a short position for Ethereum worth $2,000. In a cross margin setup, if Bitcoin drops and you incur a $1,500 loss, your account balance will now be $3,500. This balance covers both positions, reducing the risk of liquidation for either position.
- Isolated Margin Now, if you choose isolated margin for the Bitcoin position and allocate $1,500 specifically for it. If Bitcoin drops and you incur a loss of $1,500, only that position is affected, and you may face liquidation if the losses hit the maintenance margin. However, your Ethereum position remains untouched, preserving its potential for profit.
Final Thoughts
The
Binance Futures calculator is a valuable tool for estimating profits, losses, and liquidation prices in your futures trading. However, for a more comprehensive understanding of your trading costs, we recommend exploring the Binance and funding fee calculators.
These resources can help you calculate potential fees associated with your trades, including maker/taker fees and funding rates. This ensures you have a complete picture of your financial commitments when entering and exiting positions on the Binance Futures platform.
FAQs
How do you calculate profit in crypto trading?
You calculate the crypto profit by subtracting the selling price from the
cost price of the cryptocurrency. That is one of the simplest ways to calculate your profit and loss.
Is crypto futures trading profitable?
Futures offer many benefits to crypto traders. This includes high leverage limits – often up to 200x. Futures also enable traders to go long or short, ensuring that profits can be made in both
rising and falling markets.
How risky are crypto futures?
The most notable risk is volatility. While volatility can lead to significant gains, it can also result in substantial losses. Rapid price fluctuations in the market can trigger liquidation events, especially when leverage is involved, potentially wiping out a trader's entire capital.
What is the margin balance in Binance futures?
The margin balance is the balance of your Binance Futures account, including your unrealized PnL (Profit and Loss). So, your profits and losses will cause the margin balance value to change. If you're using Cross Margin mode, this balance will be shared across all your positions.
What is the profit margin on futures?
The profit margin on futures refers to the difference between the selling price of the futures contract and the initial cost or margin required to enter the position. It indicates the profitability of the trade and is typically expressed as a percentage of the total investment. In futures trading, the profit margin can be influenced by various factors, including market volatility, leverage used, and the size of the position.
Who pays margin in futures?
In futures trading, the trader or investor who opens a position is responsible for paying the margin. The margin is a percentage of the total value of the contract and acts as a security deposit to ensure that the trader can cover potential losses.
Both long and short positions require margins, and the amount needed varies depending on the broker and the specific futures contract being traded. Margin requirements can change based on market conditions and volatility.
News
Market
Knowledge
Reviews
Recommended
Upcoming Event
Coin
Glossary
Convert
