Understanding and Controlling Margin Risk Ratio in Spot Margin

[Estimated Reading Time: 3 mins]

This article explains what a margin risk ratio is in spot margin trading, how it affects your positions, and how to manage it effectively to reduce the risk of liquidation.

Why Managing Margin Risk Ratio Matters in Spot Margin Trading?

Spot margin trading allows you to borrow funds and amplify your potential returns. However, this also increases your exposure to market volatility. To avoid unnecessary losses and protect your assets, it’s important to understand and manage your margin risk ratio.

What is Margin Risk Ratio?

The margin risk ratio is a key indicator used to measure the overall safety of your margin account. It reflects the proportion of liabilities relative to your assets, adjusted by the maintenance margin ratio. A higher margin risk ratio means a higher chance of liquidation.

Formula: Margin Risk ratio = (Total liabilities × Maintenance margin ratio) ÷ Net assets

Maintenance margin reference

• In cross margin mode, the maintenance margin ratio is fixed at 10%.

• In isolated margin mode, the maintenance margin ratio varies by trading pair.

• You can check the specific maintenance margin ratios for each isolated margin trading pair in the margin ratio table.

What Happens When Margin Risk Ratio Increases?

Margin Risk Ratio Level	System Response
≥ 80%	Margin call is triggered. You will be notified to take action.
≥ 100%	Forced liquidation or position reduction is triggered. The system will sell assets in your margin account to repay loans until your risk ratio drops to ≤ 50%.

How to Control and Reduce Your Margin Risk Ratio?

Here are three effective ways to manage your margin risk ratio and avoid forced liquidation:

1. Replenish your margin Transfer additional assets into your margin account to improve your net asset value. Note: This may increase your margin exposure and potential loss if the market moves against your position.

2. Partially close your position and repay loans Reduce your open position size and use the proceeds to repay borrowed funds. This directly reduces your total liabilities and lowers your margin risk ratio.

3. Set a stop-loss order If the market moves against your position, a stop-loss order helps you exit the trade automatically before the margin risk ratio reaches dangerous levels.

FAQs

1. What happens if my margin risk ratio reaches 100%?
When your margin risk ratio is equal to or greater than 100%, Bitget will initiate forced liquidation or position reduction. Assets in your margin account will be sold at market price to repay borrowed funds until the margin risk ratio is reduced to 50% or below.

2. How can I monitor my margin risk ratio in real time?
You can check your current margin risk ratio directly in your margin account under the Spot Margin section. The system updates this value automatically based on your asset and debt balances.

3. Is the maintenance margin ratio the same for all trading pairs?
No. In cross margin, the maintenance margin ratio is fixed at 10%. In isolated margin, the ratio varies depending on the trading pair. You can find details in the margin ratio table.

4. Can I reduce my margin risk ratio without closing my entire position?
Yes. You can partially close your position and use the proceeds to repay part of the borrowed funds. This lowers your total liabilities and improves your margin risk ratio.

5. What tools can I use to protect my margin position?
You can use stop-loss orders to automatically exit trades when the market moves against you. This helps you manage risk and avoid liquidation.

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