Perpetual futures and leverage: where a position gets liquidated

A bet on the price, either way

Buying bitcoin on the spot market, you own coins. A futures contract is different: it follows the price, and you can take either side. A long gains when the price rises; a short gains when it falls. For every long contract there is a short one — someone took the other side.

Classic futures expire on a set date. Perpetual futures never do: you can hold one as long as you like. To keep its price close to the coin's, longs and shorts pay each other a regular funding payment — the next lesson.

Perpetuals trade a lot. On 2 October 2026, between 14:00 and 15:00 UTC, 25,374 BTC changed hands on Binance's BTC perpetual and 2,161 BTC on its spot BTC/USDT market — almost twelve times as much.

Margin and leverage

You do not pay for the whole position. You put up margin, and the exchange lets you hold a position several times bigger: that multiple is leverage. With $1,000 of margin at 10×, you hold $10,000 of bitcoin exposure.

Leverage does not change the price; it changes how much of your margin each move is worth. At 10×, a 1% move is 10% of your margin. At 50×, it is 50% — and a 2% move against you is all of it.

Liquidation: where the exchange steps in

Losses come out of the margin. Before it reaches zero, the exchange closes the position by force — a liquidation — as soon as what is left falls to the maintenance margin, a small share of the position's value. The trader loses the margin.

Simplified, a long is liquidated after a fall of about 1 ÷ leverage minus the maintenance rate: with a 0.5% rate, about 9.5% at 10× and about 1.5% at 50×. Fees and funding bring it a little closer; the exchange's own calculator gives the exact figure.

One real afternoon, six leverages

Leverage — a $1,000 long or short on Binance's BTC perpetual, opened at 86,768.8 at 13:00 UTC on 2 October 2026 and followed hour by hour. With an example maintenance margin of 0.5%, the 100× and 50× longs were liquidated in the 14:00 hour, when the mark price fell to 85,346.8. The 25× long survived by a hair: the lowest mark price, 83,841.9, stayed just above its liquidation price of 83,732. By 01:00 the next morning the 10× long still had $751 of its $1,000, and a 25× short had made $622.

What leverage does not change

A liquidated position is gone. Price can come back — that night BTC recovered a little — but the 50× and 100× longs were no longer there to see it. A position without leverage would have been down about 3.4% at the worst point, and still open.

Check yourself · 1 of 3You put up $500 of margin at 20×. How big is the position?

A$520B$2,500C$10,000

Show the answer

Position = margin × leverage = $500 × 20 = $10,000. Every 1% the price moves is $100 — a fifth of the margin.

Check yourself · 2 of 3BTC rises 3% while you hold a 20× long. What happens to your margin?

AIt grows by 3%BIt grows by about 60%CNothing until you close

Show the answer

At 20×, every 1% of price is 20% of the margin: 3% × 20 = 60%, before fees and funding. A 3% fall would cost the same 60%.

Check yourself · 3 of 3You open a 50× long at 80,000. With a 0.5% maintenance margin, about where is it liquidated?

A76,000B78,800C79,960

Show the answer

About 1 ÷ 50 − 0.5% = 1.5% below the entry: 80,000 × 0.985 = 78,800 (simplified; fees and funding bring it a little closer).

Takeaways

1. A perpetual future follows the price with no expiry; you can go long or short.
2. Position = margin × leverage; every 1% of price is leverage × 1% of your margin.
3. A position is liquidated when its margin falls to the maintenance margin — checked on the mark price.
4. The higher the leverage, the closer the liquidation: at 50× about 1.5% away.

Open the BTC perpetual in the terminal

Further reading

• What are mark price and price index — Binance Futures ↗
• How to calculate liquidation price of USDⓈ-M futures contracts — Binance Futures ↗