To ensure the stable operation of the trading system and prevent systemic risks caused by large accounts during extreme market conditions, OSL implements a risk limit mechanism in USDC perpetual contracts. This mechanism dynamically adjusts the required maintenance margin ratio based on the user’s position size, thereby limiting potential risk exposure.

Purpose of risk limits

The risk limit is designed to control system risks arising from highly leveraged positions. As a user’s contract position size increases, the system automatically raises the maintenance margin ratio, reducing the maximum available leverage and preventing cascading liquidations during volatile markets.

In short:

• Larger positions → Higher risk limit tier;

• Higher risk limit tier → Higher required margin and lower available leverage.

Risk limit tiers

Each trading pair has multiple predefined risk limit tiers (Risk Limit Tier). Each tier specifies:

• The maximum allowable position size (or notional value);

• The required initial margin ratio;

• The required maintenance margin ratio.

When a user’s total position value exceeds the current tier’s maximum, the system automatically upgrades the account to the next risk tier and adjusts the margin requirements accordingly.

Risk limit adjustment

• When a user increases their position and the notional value exceeds the upper limit of the current risk tier, the system will automatically move the user to a higher risk limit tier.

• When a user reduces their position and the notional value falls below the lower limit of the current tier, the system will automatically downgrade the tier.

Liquidation and risk limits

If the account equity falls below the maintenance margin requirement of the current risk tier, the system will trigger forced liquidation.

The higher the risk limit tier, the smaller the safety buffer before liquidation. Therefore, users with large positions should exercise caution when using leverage.

If you experience any issues or require further assistance, please contact the OSL Global Support Team through the app, platform, or by emailing [email protected]