Risk Limits

When large trading positions are liquidated, they can cause dramatic price swings and potentially force other traders into automatic deleveraging. This occurs if the size of the liquidated position exceeds the market's capacity to absorb it.

To mitigate these effects, BTSE has introduced a Risk Limits mechanism. This requires traders with large positions to maintain higher initial margins and maintenance margins. The benefit is twofold: it lessens the likelihood of automatic deleveraging during large position liquidations and reduces the occurrence of liquidations at off-market prices.

Important Reminder:

You must manually increase your risk limit if you wish to maintain a position and open orders that exceed the limits of your current risk level.
Higher risk limits lead to increased initial and maintenance margin requirements, which narrows the gap between your liquidation price and entry price, thus heightening the risk of liquidation or forced market transactions.

Risk Limit Levels

There are ten risk limit levels, each requiring incrementally higher maintenance and initial margin percentages as the position size in notional value increases. You may refer to the BTC perpetual contract market example in the following tables. (for other markets, refer to this page.)

Risk Limit Level	Max Position(USDT)	IM%	MM%	Max Leverage
1	3,000,000.00	1.00%	0.50%	100
2	6,000,000.00	1.33%	0.73%	75
3	12,000,000.00	2.00%	1.20%	50
4	90,000,000.00	5.00%	3.30%	20
5	120,000,000.00	10.00%	6.80%	10
6	300,000,000.00	20.00%	13.80%	5
7	500,000,000.00	25.00%	17.30%	4
8	700,000,000.00	33.33%	23.13%	3
9	900,000,000.00	50.00%	34.80%	2
10	1,100,000,000.00	100.00%	69.80%	1

When your combined position and new order size exceed your current risk limit, the system will prompt you to upgrade your risk limit level before placing the new order. Conversely, after closing a large position, you can manually lower your risk limit level to reduce the required margin thresholds.

Example:

Current position: 5M USDT BTC perpetual position notional value with risk limit level 2
Desired additional position value: 2M USDT
Current Risk Limit Level: Level 2 with Max position 6M (exceeds desired 1M USDT position value)

In this scenario, you must increase your risk limit to the 12M level to place the new 2M order. After closing the 7M position, you can manually adjust your risk limit back to the lower risk limit level to revert to the original margin rates.

How to Adjust Your Risk Limit

1. Click the settings icon on the top right in the trading page.

2. Click the edit button of the Risk Limit.

3. Click the Level you would like to use, and then click Confirm to finalize the settings.