Risk Limit (USDT-M and COIN-M Contracts)

Introduction to Risk Limit on BYDFi

The risk limit system on BYDFi plays a crucial role in managing risk and helping traders avoid excessive exposure to market volatility. This system automatically adjusts based on the trader's position size and leverage, ensuring a balanced and safer trading environment. The risk limit reduces the maximum allowable leverage as the value of a trader's position increases. In simpler terms, as traders take on larger positions, the initial margin requirement gradually increases, offering a protective measure against potential losses, particularly in volatile market conditions.

How It Works

Each trading pair on BYDFi has its own specific margin requirements. The risk limit system adjusts these requirements based on the trader's position size. As the position value rises, the initial margin and maintenance margin requirements are adjusted accordingly. This ensures that traders operate within a defined risk profile and prevents them from over-leveraging their positions.

If a trader's position value increases, the system will automatically recalculate the risk limit based on the size of the position and any active orders. If no active positions or orders are held, the risk limit will default to the lowest tier.

Risk Limit Enforcement

To prevent excessive market risk concentration and manipulation, BYDFi has set limits on the position size for each individual user. Any open orders that exceed the limit will be rejected. Additionally, we strictly prohibit users from circumventing the position limits in any way (such as using multiple accounts, concealing identities, third-party trading, or exploiting system vulnerabilities) to ensure market fairness.

How to View Risk Limit Information

To view the risk limit information for all trading pairs, click on this icon on the perpetual contract trading page, and then select 'Risk Limit.'Select the trading pair you would like to view, and you can see the complete risk limit information.

Risk Parameter Adjustment

BYDFi regularly evaluates market liquidity to ensure stable trading conditions. In the event of significant market fluctuations, the risk limit may be adjusted, affecting the following key risk parameters:

• Initial Margin Rate (IMR)
• Maintenance Margin Rate (MMR)
• Maximum Leverage Allowed
• Position Value Limit
• MMQC

Disclaimer

BYDFi reserves the right to adjust the risk limit and associated risk parameters (including Initial Margin Rate, Maintenance Margin Rate, Maximum Leverage Allowed, Position Limit, and MMQC) in response to changes in market conditions. These adjustments are part of our ongoing effort to maintain a secure and stable trading environment.

Users are encouraged to regularly monitor official announcements from BYDFi regarding any changes to the risk parameters. It is the responsibility of the user to stay informed of these updates. BYDFi will not be held liable for any losses or discrepancies arising from users' failure to review such announcements or take appropriate action based on these changes.

During the adjustment process, BYDFi's system will perform a risk assessment of your account. If the post-adjustment risk is deemed to be low, the new parameters will be automatically applied, which may result in changes to margin requirements and other associated risks. Please trade responsibly and ensure that you understand the implications of these adjustments.