What Is a Risk Limit?
A risk limit is an important risk management tool designed to reduce potential risks from market volatility by setting an upper limit on a user's position size. In futures trading, risk limits help prevent extreme market price fluctuations that may result from large-scale liquidations.
Gate adopts a dynamic risk limit mechanism, meaning users do not need to manually select a risk limit tier. The selected leverage level automatically determines the applicable risk limit. At the same time, both the position value and the value of open orders affect the range of leverage available to the user. The larger the position value and open order value, the lower the maximum leverage that can be selected. Lower leverage → higher risk limit → larger maximum position size. Higher leverage → lower risk limit → smaller maximum position size, lower initial margin ratio (i.e., 1 / selected leverage), and potentially higher returns.
During trading, as the value of a position changes, the system automatically assigns the position to the appropriate risk limit tier based on the position value and open order value. The Maintenance Margin Ratio (MMR) and Initial Margin Ratio (IMR) will be adjusted accordingly.
| 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 |
Explanation using the example above
If a user has no existing positions, the selectable leverage range is 1x–125x. For example, selecting 90x, 30x, or 2x leverage allows a maximum position value of 100,000 USDT, 1,000,000 USDT, or 3,000,000 USDT, respectively. The maximum position value must not exceed the applicable risk limit.
If the account already has open positions or pending orders, the available leverage and order size may be restricted. For example, if the combined value of existing positions and open orders is 10,000 USDT, the leverage range may still be 1x–125x, but the maximum order value will be limited to 10,000 USDT. To increase the order size, the user must select lower leverage. For instance, selecting 80x leverage will automatically increase the maximum allowable position value to 90,000 USDT in the BTCUSDT market.
Risk Limit Parameters
A risk limit consists of several key parameters, each serving a specific role in risk management:
- Risk limit: Determines the maximum allowable position value. It is determined by the selected leverage level. Lower leverage corresponds to a higher risk limit.
- Initial Margin Ratio (IMR): Used to calculate the initial margin required when opening a position. For detailed calculations, refer to Initial Margin.
- Tiered Maintenance Margin Ratio (MMR): Used to calculate the maintenance margin required to keep an existing position from being liquidated. The system calculates maintenance margin based on the latest applicable risk limit tier. A tiered calculation method is applied, where each risk limit tier uses its corresponding MMR. In hedge mode, the side with the larger position value is used for the calculation. For detailed examples, refer to Maintenance Margin.
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 trading pair to view the full risk limit details.
App
Go to the [Futures] - [More] - [Risk Limit] to view the parameters.
Select the trading pair to view the full risk limit details.
Risk Limit Value Calculation
Gate futures compares the effective position value with the risk limit to determine whether the limit has been exceeded.
Effective Position Value = max(Long Amount, Short Amount) × Mark Price × Contract Multiplier
Amount is measured in contracts.
Long Amount = Long Position Amount + Long Open Order Amount
Short Amount = Short Position Amount + Short Open Order Amount
Example:
A user holds a BTCUSDT long position of 1,000 contracts with 500 long open orders, and a BTCUSDT short position of 2,000 contracts with 500 short open orders. The mark price is 99,000 USDT, and the contract multiplier is 0.0001.
max(Long Amount, Short Amount) = max(1,000 + 500, 2,000 + 500) = 2,500 contracts
Effective Position Value = 2,500 × 99,000 × 0.0001 = 24,750 USDT
Rules for Adjusting Platform Risk Limit Parameters
Gate periodically evaluates and adjusts risk limit parameters based on market liquidity and risk management requirements. Once updated, the system applies the new parameters based on market conditions and account status.
Due to system factors, some positions may temporarily continue using the previous risk limit parameters. As a result, the displayed risk limits, margin requirements, and leverage settings may differ from the parameters shown on the leverage and margin page.
Users should refer to the real-time margin data displayed in their position details and closely monitor account risk.
Gate reserves the right of final interpretation for this product.
For further assistance, please visit the Gate official support page or contact our customer support team.
