Risk Management

Institutional approach in Crypto

Automate your counterparty relationships, and reduce risk, all on one screen.

We provide trading restriction mechanisms and other tools that strengthen protection against credit or market risk.

First Steps

Step 1. When you first log in, you'll be prompted to add a Gross limit to connect with your Liquidity Provider.

Step 2. After you click on "Add first risk profile" select the currency and limit amount.

Step 3. Finally, after adding several Liquidity Providers you will be able to track their statuses with the 'Overview' widget.

What does this section regulate?

This section regulates relationships and terms with your liquidity providers. Ask your liquidity provider for the value you should set up on your end. If it’s too great, you may always input a smaller one to limit yourself.

Once the KYC is complete, you will need the ID to set up a limit on your end.

What is a counterparty limit?

It is a value that both you and the Liquidity Provider (LP) determine for trading. To start trading with each other, counterparties should set their counterparty limits against each other. It regulates the maximum possible open position with a particular counterparty.

a. Do I need to settle every trade? No. You may lock the exchange rates and settle in bulk.

b. How does the liquidity provider assign the limit? It depends on their risk assessment policy, your jurisdiction, etc.

c. Is it a renewable limit? Yes. Once you settle what you owe your liquidity provider and withdraw the assets, the limit will restore to its initial value

d. My limit is nominated in USD, does this mean I can only buy crypto for USD? No. You may execute crypto-crypto or any crypto-fiat trades. However, the value of the results of the trade cannot exceed the limit nominated in USD.

e. What if I need a temporary increase in the limit for bulk trade? Please contact us and your liquidity provider for the temporary increase of the limit.

f. Will I have access to more liquidity if my limit gets increased? Yes. You only see the liquidity that your gross limit permits.

What is a gross limit?

The Gross limit is regulating the maximum possible open position taker or maker may open (exposure). You can make a trade only if you have trading limits set and your free limits are positive.

a. How do you calculate the gross limit? We take the absolute values of everything you see in positions tab and summarize them using the formula below. Mind you that deposits also utilize the limit. Formula:

MAX( |SUM(Long positions)|, |SUM(Short positions)|)

b. What if I set my limit in USD and my counterparty sets it in EUR? We use a mark-to-market type of accounting thus we will recalculate the EUR value back to USD and will use the smaller value out of the two. The same logic applies to limits nominated in crypto.

c. What is an applied gross free limit? This the value of how much you may use for long or short positions (buying or selling)

What is equity?

We summarize the value in USD of your open positions using the formula below: EQUITY = SUM(Positions) Since the base currency of our platform is USD, the assets you hold to maintain the required level of equity would be reevaluated against USD every 15 minutes. For example, if hold BTC as your collateral, its value may fall during the day to accommodate the limit in USD. Thus, your liquidity provider and the system would require you to top up the account.

How do I set up a limit with my liquidity provider (LP)?

  1. Go to Risk Management

  2. Press 'Add risk profile'

  3. Input the counterparty ID that you receive from your LP

  4. Select the currency of your limit

  5. Input the Gross limit (buying power)

  6. Press 'Add risk profile'

Which currency I may use for the limits?

The one you use to evaluate your market exposure. Our recommendation is to use fiat currency (USD or EUR) for the limits.

Which limit prevails if they are different?

The smaller limit prevails over the greater one. For example, You have set 30 USD of Gross limit however, your LP has set only 10 USD for the counterparty limit described above. The system will use 10 USD as the limit.

If my liquidity provider requires posting collateral, how do I know if it’s time to settle or top up?

If you see any of the following statuses: Margin Call, Low Gross Free, Restricted trading, liquidation - it’s time to top up.

I have stopped seeing quotes, what should I look for?

Firstly, please ensure you have available free gross limit

Check limits for special marks, it may be time to top up your account.

If everything checks out and the issue persists, please contact us or your liquidity provider.

Can I disable trading with the liquidity provider?

You may disable trading with a counterparty by unticking the box in the card of the 'Configure' menu. The trading will be stopped while allowing settlements. It will be convenient if you prefer to stop trading while settling, trade with your counterparty for special occasions (e.g. trading during banking hours), or if you wish to halt trading. Please note that you will still be charged the overnight rate.

Can I disable trading of certain coins with my counterparty?

Sure! Click on 'Edit' on the client’s card, and select Assets control. From this screen, you may limit the amount of a particular coin traded as well as stop trading it altogether. You can set the limit per asset either in the currency of the asset or in the other currency you prefer. In the case of the latter, we will use the mark-to-market approach to determine the value of the asset. Please keep in mind that if you have an open position nominated in the coin, your counterparty would still be able to trade with it until the moment the position is closed.

Can I restrict trading of the particular markets (trading pairs)?

Yes, whitelisting is a functionality that allows you to restrict trading to an approved list of instruments only. It is disabled by default; in order to enable it, please:

  1. Click 'Assets & Instruments' in the left hand menu

  2. Switch to the 'Instruments' tab

  3. Toggle the 'Whitelisting' switch at the top right of the corner. After you have enabled whitelisting for the first time, all instruments become non-whitelisted by default.

In order to whitelist an instrument, you need to switch on the toggle (1) as shown on the screenshot above. There are two tips that can make this process easier:

  1. Click here to collapse the list, hiding the counterparties level of hierarchy. It will make the list much more readable.

  2. Use the Search functionality to search for specific instruments

Note: whitelisting applies to all your counterparties and sub-accounts.

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