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Phoenix expresses risk both as named tiers and as a numerical risk score.

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Risk tiers

TierMeaning
SafeEffective collateral is above initial margin
AtRiskBelow initial margin but not yet cancellable
CancellableRisk-increasing resting orders can be force-cancelled
LiquidatableMarket-order liquidation can begin
BackstopLiquidatableThe account is beyond normal liquidation comfort
HighRiskDeeply stressed and potentially ADL-eligible

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Risk score

A common Phoenix state score is:
  • if maintenance margin is 0, score is 0
  • if effective collateral is positive, score is approximately (maintenance_margin / effective_collateral) * 1000
  • if effective collateral is zero or negative, score rises above 1000 with an underwater penalty
Interpretation:
  • lower is healthier
  • around 1000 means the account is at or through the liquidation boundary
  • above 1000 means the account is underwater

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What improves health

  • adding collateral
  • reducing positions
  • cancelling risk-increasing resting orders
  • receiving positive funding
  • positive mark-price movement on your exposure

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What worsens health

  • adverse price moves
  • paying funding
  • adding more size
  • placing more risk-increasing orders
  • moving collateral out of the account

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Why the same position can have a different health state tomorrow

Because health is portfolio-aware and dynamic:
  • mark price changes
  • funding changes
  • other positions in cross margin change
  • positive-uPnL credit can be discounted