Risk exposure limits while trading derivatives

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Bullish has multiple controls in place that aim to manage risks related to our derivatives products. In particular, we aim to mitigate risks arising from:

Large open interest (“OI”) in an individual derivative contract.
Large concentration of a derivative contract’s OI in too few trading accounts.
Large margin requirements by individual customers, implying large market and/or liquidation risks.

Open Interest Notional Limit

This limit is configured per contract and ensures that a new incoming order does not cause the contract OI notional to exceed the specified notional limit value.
The contract OI notional is calculated as the sum of the notional values of all the long positions in the contract, which is also equal to the absolute value of the sum of the short positions.
It is represented by OpenInterestLimitUSD.
An incoming order will be rejected if it causes the contract’s OI notional to exceed the OpenInterestLimitUSD.

Account Concentration Risk per Contract

This control is designed to prevent an individual account from exceeding a predefined percentage of the total contract OI notional and a predefined notional value.
The account percentage and notional limits are represented by ConcentrationRiskPercentTotal and ConcentrationRiskThresholdUSD, respectively.
An incoming order will be rejected if it causes the account open interest notional for a given contract to exceed the threshold defined as Max(ConcentrationRiskThresholdUSD, ConcentrationRiskPercentTotal of Contract Open Interest Notional).

Account Risk Limit

This control prevents the Initial Margin Requirement of a given account from exceeding a configured limit.
Bullish enforces a total risk limit across all your accounts. If you would like to change how your risk limit is allocated between accounts, please speak to your Relationship Manager.
Your Initial Margin Requirement is constantly recalculated as part of Bullish Portfolio Margin. You can learn more at Understanding Margin and Margin Requirements and greater detail is available at What is Bullish Portfolio Margining?
An incoming order will be rejected if it would cause the account’s Initial Margin Requirement to exceed riskLimitUSD.

Note: Only position increasing orders for contract are subject to go through the above checks

Note: Both API and UI Users will be notified with a specific reject reason corresponding to the respective controls.

Important: These limits are subject to change at any time.

Where can I see these limits?

To view the limits:

Go to the Reference tab of the web application.
Choose View contract details on the perpetual/dated futures market to see the contract specifications.

API users can see it on the markets endpoint as outlined within the API docs.