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Risk Limits

A Risk Limit is an artificial constraint that Everstrike imposes on the amount of leverage that you can use for your futures positions. If your position is very large, you may not be able to use 100x leverage. Your maximum permissible leverage in this situation may instead be 50x. Everstrike does this to prevent cascading Liquidations related to large positions entering Liquidation simulataneously. A cascading Liquidation is where the Liquidation of one position leads to the Liquidation of another position, causing an entire sequence of Liquidations. The Risk Limit for the Bitcoin Perpetual Future is 0.0000002% for every 1 USD of Position Size. This number will be added to the futures contract's Minimum Maintenance Margin and Minimum Initial Margin requirements. In other words, if your Position Size is 100,000 USD, your Minimum Initial Margin requirement will now be: 1.00% + (0.0000002% * 100,000) = 1.02% It may seem like a small increase, but for larger positions, the difference can be significant. As an example, imagine a position with a Position Size of 10 million USD. The Minimum Initial Margin Requirement will now be 1.00% + (0.0000002% * 10,000,000) = 2% This means that you can only use 1 / 2% = 50x leverage for such a position.