Risk Limits : BTSE Support

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 increases. In the BTC perpetual contract market, for instance, every additional 10M contracts you hold increases the required margins by 0.5%. (For other markets, refer to the risk limit information on the trading page.)

Here’s a breakdown:

Position Size + Order Size	Maintenance Margin	Initial Margin
≤ 10M	0.5%	1.0%
≤ 20M	1.0%	1.5%
≤ 30M	1.5%	2.0%
≤ 40M	2.0%	2.5%
≤ 50M	2.5%	3.0%
≤ 60M	3.0%	3.5%
≤ 70M	3.5%	4.0%
≤ 80M	4.0%	4.5%
≤ 90M	4.5%	5.0%
≤ 100M	5.0%	5.5%

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 must manually lower your risk limit level to decrease the margin thresholds.

Example:

Current position: 9M BTC perpetual contracts
Desired additional contracts: 2M
Total: 11M (exceeds 10M limit)

In this scenario, you must increase your risk limit to the 20M level to place the new 2M order. After closing the 11M position, manually adjust your risk limit back to the 10M 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 setting.