Liquidation is not a fee and it is not a penalty — it is the arithmetic point where the loss on your open gold position has eaten the margin behind it. Change direction, leverage, entry price or margin below and the exact price, the dollar distance and the percentage move all update instantly.
Everything starts from one identity: your posted margin buys exposure worth margin × leverage. If you put up $4,180 at 100:1, you control $418,000 of gold, which at $4,180 per ounce is exactly 100 ounces — one standard lot. The number of ounces never changes while the position is open, so the loss per dollar of adverse movement is fixed and the liquidation price can be solved in closed form.
A long position loses money as the price falls. Liquidation arrives when the accumulated loss equals the margin you posted, because at that moment equity behind the position reaches zero:
Notice what cancels out. The size of the position disappears from the answer entirely. A $500 position at 100:1 is liquidated by the same percentage move as a $50,000 position at 100:1 — 1% against you. That is why the percentage distance is really a property of leverage alone, and why traders who think in lot sizes rather than in leverage routinely misjudge how much room they have.
Almost no broker waits for equity to reach exactly zero. A stop-out level is a percentage of required margin that must remain as equity; hit it and the platform closes positions, earliest losses first. At a 50% stop-out the account cannot lose the full margin — only half of it — so the trigger arrives at half the distance:
With $4,180 of margin at 100:1 and a 50% stop-out, the long is closed after a $20.90 decline, at $4,159.10, not at $4,138.20. The distinction matters: the zero-equity figure describes the theoretical floor, while the stop-out figure is the price you will actually see on a statement.
Take a standard lot — 100 ounces — bought at $4,180.00 with 100:1 leverage. Required margin is 100 × 4,180 ÷ 100 = $4,180, and notional exposure is $418,000. Each $1 fall in gold costs $100, so the $4,180 of collateral absorbs a fall of $41.80, or 1.00% of the entry price.
| Scenario | Trigger price | Move | Move % |
|---|---|---|---|
| Long, equity zero | $4,138.20 | $41.80 | 1.00% |
| Long, 50% stop-out | $4,159.10 | $20.90 | 0.50% |
| Short, equity zero | $4,221.80 | $41.80 | 1.00% |
| Short, 50% stop-out | $4,200.90 | $20.90 | 0.50% |
Gold routinely travels 0.5% to 1% inside a single active session, and far more around US inflation prints, Federal Reserve decisions and payrolls. A one-lot position at 100:1 therefore lives or dies on a routine afternoon, which is the real argument for smaller size rather than for tighter stops alone.
The table below holds the entry price and stop-out assumption constant and varies only leverage. The margin posted is scaled so that the position stays at one standard lot, which is the honest comparison: same exposure, less collateral, less room.
| Leverage | Margin for 1 lot | Move to zero | Move at 50% stop-out |
|---|---|---|---|
| 10:1 | $41,800 | 10.00% | 5.00% |
| 20:1 | $20,900 | 5.00% | 2.50% |
| 50:1 | $8,360 | 2.00% | 1.00% |
| 100:1 | $4,180 | 1.00% | 0.50% |
| 200:1 | $2,090 | 0.50% | 0.25% |
| 500:1 | $836 | 0.20% | 0.10% |
At 500:1, one lot is liquidated by a 0.20% decline — roughly $8.36, a move that happens in minutes during the London open. The same $836 of collateral that feels like a small commitment is a position thirty times larger than the money behind it. Leverage did not make the trade riskier in notional terms; it removed the buffer that would have let the trade survive normal noise.
| Leverage | Trigger price | Distance | Distance % |
|---|
The formula assumes an isolated position funded exactly at its required margin, no swap, no commission and continuous pricing. Real accounts differ in four ways worth knowing:
If you want the collateral side of the same trade, the margin calculator shows required margin across contract sizes, and the position size calculator works backwards from a risk percentage. For the theory behind leverage tiers and margin calls, read leverage and liquidation in the academy. When you want to put a number on a live chart, the gold trading page carries the current bid and ask.
For a long, the zero-equity price is entry × (1 − 1/leverage); for a short it is entry × (1 + 1/leverage). At $4,180 with 100:1 leverage that is $4,138.20 long or $4,221.80 short, a move of $41.80 or 1%. A 50% stop-out halves that distance to $20.90.
Yes, and it is the only thing that does. Extra collateral lowers the effective leverage on the position and pushes the trigger further from the entry price. It does not change the loss already incurred, and it does not change the notional exposure — it only buys the trade more room to breathe, at the cost of more capital at risk.
Because brokers stop out on account-level margin level, not on a single position's equity, and many use a maintenance margin above zero. Swap, commission, other open trades, hedged positions and the broker's own stop-out percentage all shift the trigger. Treat this figure as the clean theoretical baseline and check your platform's contract specifications for the exact rule.