Account Health

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Risk tiers

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Risk score

• if maintenance margin is $0$, the score is $0$
• if effective collateral is positive, the score is approximately $\left(\frac{\text{maintenance margin}}{\text{effective collateral}}\right) \times 1000$
• if effective collateral is zero or negative, the score rises above $1000$ with an underwater penalty

• 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

• mark price changes
• funding changes
• other positions in cross margin change
• positive-uPnL credit can be discounted