2024-11-28 08:59:15- Overview of Margin Modes
- Liquidation Process under Each Margin Mode in UTA
- Spot Trading Rules
- References
Overview of Margin Modes
Bybit's Unified Trading Account (UTA) supports three margin modes: Isolated Margin, Cross Margin, and Portfolio Margin. Each mode has distinct liquidation processes that are important for managing your trading risk. This article outlines these processes, helping you understand how your positions are liquidated under each margin mode.
In Isolated Margin mode, the liquidation risk of a position is assessed based on the margin allocated for each position. Liquidation is triggered when the Mark Price reaches the liquidation price.
In Cross Margin and Portfolio Margin modes, the risk of a Unified Trading Account is assessed using the Initial Margin Rate (IMR) and Maintenance Margin Rate (MMR) of all positions. Liquidation is triggered when MMR reaches 100%.
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Differences Between the Margin Modes Under the Unified Trading Account
Liquidation Process under Each Margin Mode in UTA
Isolated Margin
In Isolated Margin mode, each position is managed independently, with its own allocated margin. Liquidation occurs when the Mark Price reaches the position's liquidation price. Isolated margin mode supports both One-way and Hedge (USDT-Perp Only) modes. For more information on margin calculation methods, please refers to the Margin Calculation under Isolated Margin (Unified Trading Account).
Liquidation Process
In Isolated Margin mode, liquidation will be triggered when the Mark Price hits the position’s Liquidation Price. Liquidation of one position will not affect the other position.
When a position is at risk of liquidation, Bybit uses a laddered approach to reduce the required maintenance margin and avoid full liquidation. Here's how it works:
If the Risk Limit Tier is at the Lowest Tier:
1. Cancel Active Orders: The system cancels all orders that would increase the position size, freeing up margin to help save the position.
2. Close Position: If the position still doesn't meet the maintenance margin requirement, it will be liquidated and closed at the bankruptcy price.
If the Risk Limit Tier is Above the Lowest Tier:
1. Cancel Active Orders: The system cancels all orders that would increase the position size, freeing up margin while keeping the position intact.
2. Partial Close: The system will partial close the position by submitting a Immediate-Or-Cancelledl (IOC) order of the difference between the current position value and the lower margin tier value.
3. Close Position: If the position still doesn't meet the maintenance margin requirement, it will be liquidated and closed at the bankruptcy price.
For more details, you can refer to:
Cross Margin
Cross Margin mode shares margin across all positions in all derivatives trading within the account. Liquidation is triggered when the account’s Maintenance Margin Rate (MMR) reaches 100%.
In Cross Margin mode, One-way mode and Hedge mode (only for USDT Perpetual) are supported. Both modes utilize the same formula to calculate the Account IM rate and Account MM rate. However, the formula for deriving the initial margin required for open positions differs between the two (2) modes. For more details, please refer to Margin Calculation under Cross Margin (Unified Trading Account).
Liquidation Process
The liquidation process of the Unified Trading Account under Cross Margin is as follows:
|
Margin Rate Level | ||||
|
Account Initial Margin Rate (IMR) |
≥ (Selected Leverage − 1 / Selected Leverage ) |
| ||
|
≥100% |
| |||
|
Account Maintenance Margin Rate (MMR) |
= 100% |
Step 1: Cancel Active Orders a) Derivatives: All orders, including Buy Options orders, that would increase the position size will be canceled. b) Spot: Cancel Spot Margin orders with liability or with haircut loss, i.e., orders that buy lower collateral value assets with higher ones. Step 2: Auto Repayment Auto repayment will be triggered if there are liabilities in your UTA, according to the process stated here. (View the liquidity order of margin assets) Step 3: Cancel All Orders Step 4: Close Fully Hedged Position (Hedge Mode) This step will only be applied to fully hedged positions in Hedge mode. The fully hedged positions will be settled at the Mark Price to free up the margin. If there are multiple fully hedged positions, the sequence of liquidation will be based on the contract liquidity order stated below. Step 5: Liquidation of Unhedged Position The system will calculate the amount of margin that needs to be released to reduce the MMR to ≤ 100%. Then, according to the liquidity order of the trading pairs, determine positions to reduce risk limit tiers based on liquidity order to release the required margin amount through liquidation. Step 6: Liquidation of Short Options Position If account MMR remains at 100% or above, all short Options positions will be liquidated, buy Options will not be liquidated in Cross Margin mode. The liquidation engine will prioritize orders that can be filled in the order book. If the liquidity of the order book is insufficient, Bybit will engage OTC Market Makers to square off the positions to reduce the MMR. In such cases, a liquidation fee is imposed to sustain the insurance pool, covering risk factors. Any scenario in which the above steps result in bringing MMR to below 100% will halt the liquidation process, and further steps will not be executed. (View the table in the References section below for the liquidity order of contracts) | ||
|
= 90% |
Liquidation process ends. | |||
|
≥ 160% |
The liquidation engine will take over the position and the entire position will be liquidated. Buy Options will be excluded and will not be liquidated. | |||
Portfolio Margin
Portfolio Margin mode assesses risk across the entire portfolio, with liquidation triggered when the MMR reaches 100%. For more information on how margin is calculated in Portfolio Margin, please refer to Margin Calculations under Portfolio Margin.
Liquidation Process
The liquidation process of the Unified Trading Account under the Portfolio Margin is as follows:
|
Margin Rate Level | |||
|
Account Initial Margin Rate (IMR) |
≥ (Selected Leverage − 1 / Selected Leverage) |
| |
|
≥ 100% |
| ||
|
Account Maintenance Margin Rate (MMR) |
= 100% |
Step 1: Cancel All Orders All orders will be canceled, regardless it is open or closing orders, including TP/SL. Step 2: Auto Repayment Auto repayment will be triggered if there are liabilities in your UTA, according to the process stated here. Assets or borrowings involved in Spot Hedging will not be used for repayment or repaid. (View the liquidity order of margin assets) Step 3: Liquidation of Assets involved in Spot Hedging and Derivatives Positions If the account's MMR remains at 100%, the system will perform laddered liquidation by managing the user’s assets and positions in different currencies in the following order: (A) Assets exclusively used for Perpetual contracts settled in USDC, Perpetual contracts settled in USDT, or Inverse Perpetual contracts settled in the respective base token. (B) Assets outside of Category A are categorized under Category B, which includes spot, futures, and options investment portfolios. It's important to note that portfolios for USDC perpetual and USDT perpetual also fall under this category. a. The system will prioritize liquidating the assets falling under category (A), according to the liquidity order of the trading pairs until the account's MMR ≤ 90%, or no more eligible currencies remain. b. If a user’s assets fall under category (B), the system will sequentially evaluate each derivative's position to simulate the impact on the account's MMR after partially closing each Derivative position and selecting the position with the greatest reduction in MMR for liquidation. c. If users have activated Spot Hedging, our liquidation simulation will also consider the combined impact of changes in Spot assets used for hedging after liquidating a Derivative position. d. During the simulation process for positions falling under category (B), the quantity to be liquidated for each Derivative position will be determined based on the actual market liquidity condition. However, the maximum contract quantity to be liquidated will not exceed the position's opened quantity or the maximum order size per trade on the platform. e. If we cannot identify a position that can effectively reduce the account's MMR during the liquidation simulation (considering an exceptionally good hedging portfolio), the liquidation process will be suspended. However, the system will continue attempting to identify suitable positions for liquidation until the account is taken over or the liquidation process ends. | |
|
= 90% |
Liquidation process ends. | ||
|
≥ 160% |
The liquidation system will take over the Spot assets and Derivatives positions and liquidate the entire assets and position within your UTA. | ||
Spot Trading Rules
Under the Unified Trading Account, there are two (2) scenarios worth noting for Spot Margin trading:
1. The Spot Margin trading function is not enabled:
-
When the IMR exceeds 100%, it is not allowed to place an order to buy lower conversion rate assets with higher ones.
-
When there is a Derivatives position, the Spot order will comprehensively calculate the amount available for trading based on the available balance and collateral asset balance.
2. The Spot Margin trading function is enabled:
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When the IMR reaches (Selected Leverage − 1 / Selected Leverage), Spot margin orders cannot be placed.
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When the MMR reaches 100%, margin assets will be sold to settle all liabilities.
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When the IMR exceeds 100%, it is not allowed to place an order to buy lower conversion rate assets with higher ones.
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When the available margin in your Unified Trading Account is more than zero, the user can automatically borrow and sell more amounts when placing an order.
References
The liquidity order of trading pairs or margin assets is as follows:
Derivatives
|
Order |
Contracts |
|
1–20 |
BTCUSDT, ETHUSDT, SOLUSDT, BTCUSD, ETHUSD, XRPUSDT, BTCPERP, XRPUSD, SOLUSD, GMTUSDT, SANDUSDT, ADAUSDT, BNBUSDT, MATICUSDT, AVAXUSDT, APEUSDT, LINKUSDT, LTCUSDT, TRXUSDT, UNFIUSDT |
|
21–40 |
NEARUSDT, GALAUSDT, DOTUSDT, ATOMUSDT, AXSUSDT, SHIB1000USDT, USDCUSDT, UNIUSDT, LUNA2USDT, ADAUSD, DOTUSD, BCHUSDT, WAVESUSDT, AAVEUSDT, DOGEUSDT, STORJUSDT, MANAUSDT, ZILUSDT, RUNEUSDT, FTMUSDT |
|
41–60 |
SNXUSDT, KNCUSDT, ETCUSDT, XTZUSDT, THETAUSDT, OPUSDT, EOSUSDT, OGNUSDT, CHZUSDT, MTLUSDT, CRVUSDT, XLMUSDT, XMRUSDT, FTTUSDT, BELUSDT, EGLDUSDT, FLMUSDT, 1INCHUSDT, SUSHIUSDT, COMPUSDT |
|
61–80 |
BATUSDT, SRMUSDT, ZRXUSDT, TRBUSDT, FITFIUSDT, OMGUSDT, IOSTUSDT, CROUSDT, ENSUSDT, LRCUSDT, KAVAUSDT, BLZUSDT, ENJUSDT, ALGOUSDT, BITUSDT, BNXUSDT, MKRUSDT, FILUSDT, YFIUSDT, ZECUSDT |
|
81–100 |
ALICEUSDT, DYDXUSDT, ARPAUSDT, GALUSDT, VETUSDT, API3USDT, BSWUSDT, ARUSDT, KSMUSDT, HNTUSDT, ONEUSDT, ONTUSDT, OCEANUSDT, ICPUSDT, CTSIUSDT, HBARUSDT, DASHUSDT, SXPUSDT, 1000XECUSDT, PEOPLEUSDT |
|
101–120 |
WOOUSDT, NEOUSDT, BANDUSDT, XEMUSDT, CTKUSDT, C98USDT, AUDIOUSDT, LITUSDT, RENUSDT, COTIUSDT, CHRUSDT, SKLUSDT, GRTUSDT, LINAUSDT, MASKUSDT, GSTUSDT, BAKEUSDT, ANKRUSDT, IOTXUSDT, QTUMUSDT |
|
121–140 |
DARUSDT, AKROUSDT, BALUSDT, CVXUSDT, GLMRUSDT, AGLDUSDT, IOTAUSDT, ALPHAUSDT, HOTUSDT, JSTUSDT, ICXUSDT, REQUSDT, ROSEUSDT, RSRUSDT, KDAUSDT, YGGUSDT, BSVUSDT, TOMOUSDT, DENTUSDT, REEFUSDT |
|
141–160 |
DARUSDT, AKROUSDT, BALUSDT, CVXUSDT, GLMRUSDT, AGLDUSDT, IOTAUSDT, ALPHAUSDT, HOTUSDT, JSTUSDT, ICXUSDT, REQUSDT, ROSEUSDT, RSRUSDT, KDAUSDT, YGGUSDT, BSVUSDT, TOMOUSDT, DENTUSDT, REEFUSDT |
|
161–180 |
CVCUSDT, FXSUSDT, MINAUSDT, KLAYUSDT, 1000BTTUSDT, XCNUSDT, SUNUSDT, LPTUSDT, 10000NFTUSDT, DGBUSDT, RNDRUSDT, RVNUSDT, ACHUSDT, JASMYUSDT, SCRTUSDT, BOBAUSDT, SPELLUSDT, CTCUSDT, CKBUSDT, CREAMUSDT |
|
180 and above |
SCUSDT, BICOUSDT, ETHPERP, SOLPERP, GMTPERP, ADAPERP, AVAXPERP, XRPPERP, EOSUSD, LTCUSD, MANAUSD,..... (new released symbols) |
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In the event of liquidation, Futures position that is the nearest to the settlement date will be liquidated first.
Margin Assets
For the liquidity order for margin assets, please refer to here.
Yes
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