The risk limit is a system that prevents high-leverage contracts from being liquidated at once. Applying the risk limit means that the higher the value of the position, the higher the initial margin required and the lower the maximum leverage available. In addition, each position has a risk limit level and a maintenance margin rate according to the level. If the position margin does not meet the maintenance margin rate of the risk limit level, partial liquidation occurs until the criteria meet the level below the current risk limit level. This allows traders to avoid liquidation of their entire position at once. Traders are free to modify their level within the risk limits.

**Risk Limit Calculation Equation**

$$\small\textsf{Risk Limit Level}=max\left(0,1+interger\left(\frac{Position\:Value-Base Value}{Step Value}\right)\right)$$

\begin{align}&\scriptsize \textsf{Base Value} : \textsf{BTC limit for the lowest risk limit (ex.} > \textsf{100 BTC)}\\&\scriptsize \textsf{Step Value} : \textsf{BTC interval between each risk limit level (ex.} > \textsf{100 BTC)}\\&\scriptsize \textsf{Risk Limit Level} : \textsf{Starts from 0}\end{align}

*** Risk Limit**

The Position Value of the Risk Limit is the summation of all position values of current open positions.

$$ \small\textsf{Position Value} = {\textsf{Quantity}\over\textsf{Mark Price}} $$

※Note: The system calculates the sum of long/short position values.

<Risk Limit Adjustment Example>

Traders can freely adjust their risk limits. However, in the case of insufficient margin when increasing the risk limit (lowering leverage), the risk limit can only be adjusted after the position is closed. We will set an example of adjusting the risk limit after closing the position below.

David currently holds a position worth 150 BTC with 100x leverage. He decides to add 60 BTC to the position resulting in a sum of 210 BTC worth positions. To do so, David closes his current position worth 150 BTC and adjusts his risk limit according to the risk limit table. Once the risk limit has changed, David can only submit orders up to 66x leverage, 1.0% initial margin and 0.5% maintenance margin. Now he can submit his order worth 210 BTC.

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