Risk Limit (Inverse Contract)
    bybit2024-01-24 02:45:49

    The concept of dynamic leverage is used for Bybit's Risk Limit. This means the larger the contract value traders hold, the lower the maximum leverage allowed. In other words, the initial margin requirement incrementally goes up by a fixed percentage at every specific increase in contract value level. Please note that the maintenance margin base rate is 0.5% for BTC and 1% for ETH, EOS and XRP, and the margin requirements will increase or decrease accordingly as risk limit changes.


    Risk limit is a risk management measure to limit the risk exposure of traders. A large position with high leverage may cause huge contract losses when liquidated in a highly volatile market. Contract losses are created when the position is liquidated beneath the bankruptcy price and coupled with a depleted insurance fund that is insufficient to fully absorb the losses, Auto deleveraging (ADL) system will be triggered. Traders with a large position pose an increased risk of ADL to other traders on the exchange. To minimize the possibility of ADL occurring, Bybit imposes a risk limit on all trading accounts according to their positional contract value held.


    As the position contract value increases, the maintenance margin and initial margin requirements will also increase. Users can choose to increase or decrease the risk limit through the Asset Overview panel. The default risk limit level on Bybit will always start from the lowest risk limit level.


    Bybit will perform a laddered liquidation process for traders using higher risk limits, and will automatically reduce the level of maintenance margin by attempting to reduce the risk limit levels to the lowest possible level to avoid an immediate full liquidation of the trader’s position. For more details on the Liquidation process, please click here


    Risk Limit Table:


    Risk Limit Base Value

    Risk Limit Increment

    Maintenance Margin Base Rate

    Maintenance Margin Increment at every level

    Initial Margin Base Rate

    Initial Margin Increment at every level

    DOTUSD20000 DOT20000 DOT1%0.5%2%1%
    BITUSD250000 BIT250000 BIT1%0.5%2%1%
    ADAUSD200000 ADA200000 ADA1%0.5%2%1%
    MANAUSD50000 MANA50000 MANA1%0.5%2%1%
    LTCUSD2000 LTC2000 LTC1%0.5%2%1%



    TermFormulaEg: ETHUSD(Total Position Value 4000 ETH, hence limit needs to increase by 1 time)
    New Risk Limit(RL)RL Base value+ (Number of incremental *RL incremental value)3000 + (1*3000)= 6000 ETH
    New Maintenance Margin(MM) %MM Base rate + (Number of incremental*MM incremental rate)1% + (1*0.5%)= 1.5%
    New Initial Margin (IM) %IM Base rate + (Number of incremental*IM incremental rate)2% + (1*1%)= 3%
    New Maintenance Margin AmountNew MM%* Total Position Value1.5%*4000 = 60 ETH

    For more details, please refer to the table below. 


    Risk Limit for BTCUSD 

    Position ValueMaintenance MarginInitial MarginMax Leverage
    150 BTC0.5%1.00%100.00
    300 BTC1.0%1.50%66.67
    450 BTC1.5%2.00%50.00
    600 BTC2.0%2.50%40.00
    750 BTC2.5%3.00%33.33
    900 BTC3.0%3.50%28.57
    1050 BTC3.5%4.00%25.00
    1200 BTC4.0%4.50%22.22
    1350 BTC4.5%5.00%20.00
    1500 BTC5.0%5.50%18.18


    How to View Risk Limit Information


    To view the Risk Limit information for all trading pairs, you can click on the Derivatives Info → Derivatives Trading Rules → Margin Data or visit this page.





    Select the trading pair you would like to view, and you can see the complete Risk Limit information. 




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