How Is the Bankruptcy Price Calculated for a Long Position versus a Short Position?

For a long position, the bankruptcy price is calculated as the entry price minus the initial margin per unit. For a short position, it is the entry price plus the initial margin per unit.

In both cases, the calculation represents the price at which the trader's equity is fully depleted. The formula is adjusted to account for any liquidation fees and the funding rate paid or received up to that point.