Glossary
What is Bankruptcy price
The price at which a position's loss equals its whole margin; liquidation fires earlier, at the maintenance level, and the insurance fund absorbs the gap.
How it works
Example
A long from 60,000 at 10×: bankruptcy price 60,000 × (1 − 1/10) = 54,000. With a 0.5% maintenance rate liquidation comes earlier, near 60,000 × (1 − 0.1 + 0.005) = 54,300.
Common mistake
Mixing up the bankruptcy price with the liquidation price: your stop belongs well before both.
Read next
Related terms
Frequently asked questions
- Where can I learn Bankruptcy price step by step?
- In the Trading OS Academy: “Leverage is sizing, not greed”.
- What is Bankruptcy price related to?
- Liquidation; Maintenance margin; Insurance fund; Auto-deleveraging (ADL).
Plan versus outcome — for every trade
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