How it works
Position value is margin × leverage. With 1,000 in margin at 10×, you control a position worth 10,000, so every 1% move against you costs 100, which is 10% of your margin. The position is liquidated when losses have used up the initial margin down to the maintenance margin. For a long position the calculator uses liquidation price = entry × (1 − 1 / leverage + maintenance margin), for a short position entry × (1 + 1 / leverage − maintenance margin). The buffer is the distance between entry and liquidation price in percent: at 10× and a 0.5% maintenance margin, a 9.5% move against you is enough. If the maintenance margin is equal to or larger than 1 / leverage, the position would be liquidated right away.
This is a simplified model of a single isolated position with a fixed maintenance margin. Brokers and exchanges apply their own rules: tiered margin requirements, trading fees, funding or overnight costs, mark prices instead of last prices and liquidation fees all shift the actual level, usually closer to your entry. In fast markets and on gaps, a liquidation can also be filled at a worse price. Check your provider's margin rules before you rely on any number.