Leverage and Stop-Loss Table
At which leverage your liquidation price arrives before your stop-loss does. Past that point the stop is decorative and your real risk is the whole margin.
- Amount at risk
- 100.00 USD
- Position notional
- 5,000.00 USD
- Leverage this implies
- 0.50×
- Leverage that liquidates at your stop
- 40.00×
| Leverage | Move to liquidation | vs your stop |
|---|---|---|
| 2× | 49.50% | stop hits first |
| 3× | 32.83% | stop hits first |
| 5× | 19.50% | stop hits first |
| 10× | 9.50% | stop hits first |
| 20× | 4.50% | stop hits first |
| 25× | 3.50% | stop hits first |
| 50× | 1.50% | liquidation hits first |
| 100× | 0.50% | liquidation hits first |
The table shows how far price can move before an isolated-margin position is liquidated, at each leverage. Any row marked liquidation hits first means the exchange closes you before your stop does — at which point the stop is decorative. Fees and funding make the real level slightly worse than shown.
The question this answers
"How much leverage is too much" usually gets answered with a preference. It has a precise answer for any given setup: too much is any leverage where liquidation sits closer than your stop.
Below that threshold, leverage is bookkeeping — it determines the margin you post, not what a losing trade costs. Above it, your stop never executes, the exchange closes the position instead, and the loss you take is the margin rather than the amount you sized for.
The arithmetic
distance to liquidation ≈ (1 ÷ leverage) − maintenance margin rate
stop is meaningful while:
stop distance < distance to liquidation
Rearranged, the maximum leverage at which your stop still executes is
1 ÷ (stop distance + MMR). With a 2% stop and a 0.5%
maintenance rate that is 40× — and every input that widens the stop lowers
it sharply.
Reading the table
Rows marked stop hits first are configurations where your exit works as designed. Rows marked liquidation hits first are ones where it does not, regardless of what the order book shows at the time.
The transition is usually sharper than people expect. Going from 10× to 25× does not make a stop "riskier" by degrees — at some point between them the stop simply stops being the thing that closes your position.
The order to decide things in
Leverage should be last, and it should be an output:
- Where is the idea wrong? That is the stop.
- What is the most you will lose on it? That is the risk budget.
- Those two determine position size — see the position size calculator.
- Position size ÷ balance is the leverage. You did not choose it.
- Check it against this table. If liquidation arrives first, the position is too large for the account, not the stop too tight.
Choosing leverage first and deriving everything else from it is the common order, and it is how a stop ends up inside a liquidation price without anyone noticing.
Two things the table leaves out
Fees and funding both consume margin, so they move real liquidation closer than shown — see the liquidation price calculator for the detail. And maintenance margin is tiered, rising with position size, so a large position is liquidated earlier than the rate you entered suggests. Both errors point the same way, which is the one to leave room for.
FAQ
How much leverage is too much?
There is a non-arbitrary answer for any given setup: too much is any leverage where liquidation arrives before your stop. Past that point the stop is decorative and your actual risk per trade is the whole margin, not the amount you planned to lose. That threshold depends on your stop distance and the venue maintenance margin, which is what this table computes.
Does higher leverage increase my risk per trade?
Not by itself. If position size is set by your stop distance and risk budget, leverage is an output — it just describes how much margin that position requires. What high leverage does is move the liquidation price closer, and once it is closer than your stop, your loss on a bad trade is no longer the amount you chose.
Why does the table show some leverages as not viable?
Because at very high leverage, the initial margin rate can fall below the maintenance margin rate, meaning the position would be liquidatable the moment it opens. The venue prevents this by capping leverage per tier, so those rows exist to show the direction the arithmetic runs in rather than a configuration you could enter.
Should I lower leverage or widen my stop?
Lower the leverage, in almost every case. A stop is where your idea is wrong, so widening it to accommodate leverage means accepting a worse exit to keep a position size you chose for unrelated reasons. Reducing leverage keeps the stop where it belongs and reduces the position to what the account can carry.