1. Setting Long/Short Risk Limits
Risk limits are a risk management mechanism used to restrict a trader's position risk. In an environment of significant price fluctuations, traders holding large positions with high leverage alone may incur substantial liquidation losses. This system employs the concept of dynamic leverage, allowing users to freely choose the maximum position size. However, this choice will correspondingly affect the maximum leverage, initial margin ratio, maintenance margin rate, and liquidation fees.
2. Maximum Leverage and Initial Margin Ratio
The maximum leverage available for user trades will change based on the value of the trader's held position. The larger the value of the held position, the lower the maximum leverage that can be used. Choosing higher leverage will result in a smaller allowable position size. Additionally, different trading pairs will have different corresponding maximum leverage and position tiers.
3. Tiered Maintenance Margin Rate
To better manage risk and optimize user trading flexibility, the perpetual contract adopts a tiered maintenance margin rate, applying different rates to positions with different values. Generally, positions with higher values will require a higher maintenance margin rate, making them more susceptible to liquidation at an equivalent loss ratio.
View Tiered Maintenance Margin Rate in the link below:
4. Tiered Liquidation Fee Rates
Corresponding to the tiered maintenance margin rate, tiered liquidation fee rates apply different rates to positions with different values. Typically, tiered liquidation fee rates will be equal to the tiered maintenance margin rates.
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Risk Warning: There are significant risks in trading cryptocurrency. Please carry out investment operations according to your actual situation. This information is not financial or investment advice from BitVenus, and BitVenus will not be responsible for your trading losses.