Bybit enhances margin calculation formula – What's new
Bybit enhances margin calculation formula – What's new
Bybit, one of the leading cryptocurrency exchanges, has announced updates to its margin calculation formula within the Portfolio Margin mode. The changes, aimed at improving the precision of margin calculations and bolstering risk management, are being gradually rolled out to include Inverse Contracts in stress test scenarios.
The new margin calculation formula introduces several enhancements designed to better assess potential risks and manage margin requirements more effectively:
- Maximum loss calculation: The updated stress test will now incorporate profit and loss from Inverse Perpetual and Inverse Futures contracts. This adjustment aims to provide a more accurate evaluation of how changes in the underlying asset might impact traders' positions.
- USDT-USDC spread contingency: The revised formula will also consider the risks associated with changes in spreads between various contract types, including Inverse Perpetuals, Inverse Futures, USDT Perpetuals, USDC Perpetuals, USDC Futures, and USDC Options. The updated formula ensures that margin requirements are more closely aligned with the actual market conditions.
- Delta spread contingency: Additionally, the updated formula will account for risks arising from calendar spreads and basis risks involving Inverse Perpetual and Inverse Futures contracts. This consideration allows for a more comprehensive evaluation of potential risks, especially in scenarios where there are significant differences in the price movements of related contracts over time.
Bybit advises traders to adjust their trading strategies in light of these changes to safeguard their accounts.
The exchange acknowledges that these updates might require users to reassess their risk management approaches but emphasizes that the improvements are necessary to ensure a safer and more stable trading environment.
