Introduction to Risk Limits
"Dynamic leverage" plays a pivotal role in Bybit’s risk limit mechanism. As a trader’s position size increases, the supported leverage decreases—meaning higher position values trigger incremental increases in initial margin requirements. Each trading pair has a base maintenance margin rate, which adjusts based on risk limit tiers.
Risk limits serve as a critical risk management tool, reducing exposure during high volatility. Large leveraged positions liquidated below bankruptcy price may lead to significant contract losses. If insurance funds can’t cover these losses, Auto-Deleveraging (ADL) occurs, potentially affecting other traders. To mitigate ADL risks, Bybit sets risk limits based on total contract value across all accounts.
Positions automatically adjust risk limit tiers as their value grows, altering margin requirements. Without open positions or orders, the system defaults to Tier 1.
For higher-tier traders, Bybit employs a liquidation ladder to partial liquidate positions incrementally, avoiding full liquidation.
Related guides:
- Classic Accounts: Liquidation Process (Classic Accounts)
- Unified Accounts: Liquidation Rules (Unified Accounts)
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Viewing Risk Limit Information
Web Platform
Navigate to Contract Details → Derivatives Trading Rules → Margin Parameters or visit this page. Select a trading pair to view its risk limits.
Note:
- Risk limits apply to Isolated/Cross Margin modes only.
- Unified Accounts’ Portfolio Margin mode calculates risk holistically, disabling manual adjustments.
Automatic Tier Adjustment Rules
Leverage determines maximum position size. Tier adjustments occur within this limit, ensuring account safety without modifying leverage.
Key Points:
- System pre-checks to prevent immediate liquidation.
- Orders exceeding max position value (per leverage) are rejected.
Example:
At 90x leverage (max position: $2.6M):
- Existing position: $1M → New $1M order raises tier to Tier 2.
- Additional $1M order → Rejected (total $3M > $2.6M).
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Calculating Risk Limit Value
Unidirectional Positions
Formula: Effective Value = Max(Long Position + Long Orders, Short Position + Short Orders)
Examples:
- Long: 1 BTC ($40k) + 0.5 BTC buy order ($30k) → $55k.
- Long: 1 BTC ($40k) + 0.5 BTC buy ($30k) + 3 BTC sell orders ($50k) → $150k.
Hedged (Bidirectional) Positions
Same formula applies.
Example:
- Long: 1 BTC ($40k) + 0.5 BTC buy ($30k); Short: 1 BTC ($50k) + 1 BTC sell ($60k) → $110k.
Platform Risk Parameter Adjustments
Bybit periodically updates risk limits based on market liquidity. Adjustments affect:
- Initial Margin Rate (IMR)
- Maintenance Margin Rate (MMR)
- Max allowed leverage
- Position limits
Process:
- Notification: Users receive announcements/emails.
Pre-check: Lower-risk tiers apply immediately. Higher-risk tiers enter a 10-day buffer:
- Only reduce-only orders allowed.
- New orders blocked (except conditional).
Post-Buffer: Adjusted parameters apply; positions may face liquidation.
Pro Tip: Deposit additional funds or manage positions during the buffer to avoid liquidation.
Special Notes
- Bots/TWAP: Reduce-only executions during buffer.
- Leverage Mismatch: Manual adjustment required post-change.
Risk Criteria:
- Classic Accounts: Liquidation price (new tier) × 0.75 + 0.25 × entry price < mark price (longs).
- Unified Accounts: New maintenance margin rate < 75%.
FAQ
1. Why does my risk limit tier change automatically?
The system adjusts tiers based on position/order value to maintain optimal margin requirements.
2. Can I override automatic tier adjustments?
No, but you can reduce position size or increase leverage (if eligible).
3. What happens if my account is in the 10-day buffer?
Only reduce-only orders execute. Deposit funds to align with new tiers.
4. How are hedged positions calculated?
Same as unidirectional—maximum side value (longs + buy orders vs. shorts + sell orders).
5. Where can I check updated risk parameters?
Visit Margin Parameters.