Risk Tiers
The larger the position, the lower the available leverage and the more margin it requires. Learn how risk tiers work and where to find values for each instrument.
Each futures instrument has a set of risk tiers. The tier is determined by position size: larger positions move to higher tiers with stricter requirements.
How it works
Two parameters change at each tier:
- Maximum leverage — decreases — High leverage is available for smaller positions. As the position grows, the leverage ceiling falls and may reach the minimum at the highest tiers.
- Maintenance margin rate — increases — This is the portion of the position that must be held as a reserve. The higher the tier, the larger the required reserve and the sooner liquidation occurs.
The tier is recalculated automatically. Increasing the position may move it to the next tier and raise its margin requirements; no separate setting is required.
A large position is harder to close at a fair price because the order book may not contain enough matching orders. The larger the position, the greater the risk of significant slippage during liquidation. Larger positions therefore have stricter margin requirements.
Why an Order May Be Rejected
The risk limit is checked when placing each order - and is calculated not only for the open position. Three things come into play at once:
- current position;
- the order you are placing now;
- your already placed orders for this instrument.
If the total amount exceeds the maximum risk limit for the instrument, the order is rejected.
A position may be small and free margin may be available, yet the order is still rejected. Large unfilled limit orders for the same instrument usually consume the remaining risk limit. Cancel unnecessary orders to free up that limit.
Risk levels by instrument
The values depend on the instrument and may change, so the table is loaded automatically instead of being entered manually in the article.
Frequently asked questions
The leverage ceiling depends on the position size. Maximum leverage is available only at lower risk tiers, meaning smaller positions. The larger the position, the lower the ceiling. The exact values for each instrument are shown in the table above.
The instrument's risk limit was most likely reached. It includes the open position, all existing orders, and the new order. Check your unfilled limit orders and cancel any unnecessary ones to free up the limit.
Yes. As the tier increases, the maintenance margin rate also increases, meaning a larger reserve must remain in the position. At the same entry price, a higher rate brings the liquidation price closer. Increasing the position therefore tightens the margin requirements.