Risk Limit Tiers

You may have seen this warning while setting up trades on Bybit.

Like the maximum position size, this issue informs you Bybit will not accept the trade in it's current state as the value of that position is greater than Bybit accepts in it's tier 1 risk limits.

These tiers are what dictates Initial Margin Required and Maintenance Margin Required (Both explained here).

These values are necessary for VEMA to perform leverage calculations and ensure your liquidation price is at a safe distance from entry.

As the risk limit increases, the MMR increases proportionally to the IMR - meaning you get liquidated at a lower loss of margin (earlier in the red) than in tier 1. 

For example, Tier 1 has an IMR of 1% and an MMR of 0.5%.

This would lead to a liquidation at a 50% (1 - [0.5% / 1%] ) Loss of margin, so for a 10x leverage trade, a 5% move against your position would see you liquidated.

Howver for Tier 2 has an IMR of 1.75% and an MMR of 1%.

This would lead to a liquidation at a 43% (1 - [1% / 1.75% ]) Loss of margin, so for a 10x leverage trade, a 4.3% move against your position would see you liquidated.

You can see this leads to "faster" liquidations as your position tier increases.

Currently VEMA only allows traders to place trades with a tier 1 risk limit, as this gives the best IMR:MMR ratio and for most symbols offers large risk limits such as BTC's $2,000,000 position value in the screenshot above.

If you are running into this issue regularly, submit a support ticket here.