What is Risk Limit
Risk limit is a crucial risk management tool designed to mitigate potential risks arising from market volatility by capping the maximum position size a user can hold. In futures trading, risk limit helps prevent extreme price fluctuations caused by large-scale liquidations.
Gate implements a "dynamic adjustment" mechanism for the risk limit. You do not need to select a risk limit tier manually. The leverage selected determines the maximum allowable position size. Additionally, position value and open order value affect the range of available leverage. You can only select leverage within the maximum leverage supported by the current risk limit tier. Lower leverage provides a higher risk limit, allowing for a larger position size. Higher leverage results in smaller allowable position size but increases the potential return due to the lower initial margin requirement (i.e., 1/leverage).
During trading, as the position value changes, the system automatically determines the user's risk limit tier based on the position and open order value. Corresponding maintenance and initial margin requirements adjust accordingly. When there are no positions or orders, the risk limit tier defaults to Tier 1.
| Pair | Tier | Risk Limit | Tiered MMR | IMR | Max Leverage |
|---|---|---|---|---|---|
| BTCUSDT | 1 | 20,000 | 0.40% | 0.80% | 125x |
| BTCUSDT | 2 | 50,000 | 0.45% | 0.90% | 111x |
| BTCUSDT | 3 | 100,000 | 0.50% | 1% | 100x |
| BTCUSDT | 4 | 200,000 | 0.70% | 1.33% | 75x |
| BTCUSDT | 5 | 1,000,000 | 1.00% | 2.00% | 50x |
| BTCUSDT | 6 | 2,000,000 | 2.00% | 4.00% | 25x |
| BTCUSDT | 7 | 3,000,000 | 5.00% | 10.00% | 10x |
| BTCUSDT | 8 | 5,000,000 | 50.00% | 95.00% | 1.05x |
Example: If a user holds no position, the leverage range available is 1-125x. Choosing 90x leverage leads to a maximum position value of 100,000 USDT. Selecting 30x is 1,000,000 USDT, while 2x is 3,000,000 USDT. The user's position value cannot exceed the maximum limit of the chosen tier.
If a user has existing positions or open orders, the leverage range may be limited. For instance, if the total position and open order value is 10,000 USDT, the leverage range remains 1-125x, but the maximum order value is still 10,000 USDT. To place larger orders, the user must choose lower leverage. Selecting 80x will automatically adjust the max position value to 90,000 USDT for BTC/USDT.
Risk Limit Parameters
Risk limit consists of several key parameters, each playing a different role in risk management.
- Risk Limit: Determines the maximum position value a user can hold. The platform dynamically adjusts this based on the position value. As it changes, the required maintenance margin updates accordingly.
- IMR (Initial Margin Ratio): Used to calculate the initial margin required for placing orders. For details, see: Initial Margin Calculation | Gate .
- Tiered MMR (Maintenance Margin Ratio): Used to calculate the maintenance margin–the minimum margin required to keep a position from being liquidated. The system applies a tiered approach, where each risk limit tier has a corresponding MMR. In hedge mode, the MMR is based on the position with the larger value. For details, see: Maintenance Margin Calculation | Gate .
- Max Leverage: Indicates the maximum leverage a user can use in the current market. Note that the higher the leverage, the lower the position size allowed. See section 1 for examples.
How to View Risk Limit Information
Web
Go to the Futures Trading Page] - [Coin Overview] - [Leverage and Margin] to view the parameters, or [click here .
Select the pair to view detailed risk limit information.
App
Go to the [Futures] - [More] - [Risk Limit] to view parameters.
Select the pair to view detailed risk limit information.
Risk Limit Tier Auto-Adjustment Rules
The selected leverage determines the maximum position size. The system adjusts the risk limit tier (not leverage) based on your orders and trades to ensure the safest risk tier for your position.
Note: Before adjusting the risk limit, the system will simulate whether liquidation would be triggered. If liquidation is triggered, the tier remains unchanged. Example: User A sets BTCUSDT leverage to 100x. According to the risk limit table, the max position value is 2,000,000 USDT.
If A already holds a 1,000,000 USDT long position and places an additional 400,000 USDT long order, the risk limit tier will auto-adjust to Tier 2. However, placing another 800,000 USDT long order will be rejected, as it exceeds the 2,000,000 USDT limit for 100x leverage. To raise the maximum position size, A must lower leverage to at least 75x (limit: 3,000,000 USDT).
Risk Limit Value Calculation
Gate compares the effective position value with the risk limit. The formula is: Effective Position Value = Max(Long, Short) × Mark Price × Contract Multiplier. The unit of Max(Long, Short) is Contracts. Long = Existing Long Positions + Long Open Orders Short = Existing Short Positions + Short Open Orders
Example: User A holds 1,000 BTCUSDT long contracts and 500 long open orders; and 2,000 short contracts and 500 short open orders. If the mark price is 99,000 USDT: Max(Long, Short) = Max(1,000+500, 2,000+500) = 2,500 Contracts Effective Position Value = 2500 × 99,000 × 0.0001 = 24,750 USDT
Platform Risk Limit Adjustment Rules
Gate regularly assesses market liquidity and may adjust the risk limit when significant changes occur. The following parameters may be affected:
- Max Leverage
- Risk Limit
- Tiered MMR
Before adjusting the risk limit, the system will run a simulation on your account. If the resulting risk tier is lower, the new parameters will be applied, and your margin requirements may change. If the resulting tier is higher, the current risk limit will remain in effect until the system reassesses and confirms that the position is safe.
Gate reserves the final right to interpret the product. For further assistance, please visit the Gate official support page or contact our customer support team.
