Important: Margin trading is high risk and only available to eligible professional investors in select locations. Margin trading is not available in Hong Kong or to Hong Kong users.
Warning: Margin trading is a high risk activity. Please read carefully the Risk Warnings and Appendix 2, Terms for Lending Services on Bullish.com.
What is collateral?
Collateral determines how much you can borrow and it is a form of security to cover potential losses. Collateral can be liquidated (forcibly sold) to repay your debts. Collateral is liquidated to reduce the risk of your account entering Default when it becomes dangerously high.
How is your collateral calculated?
A trading account’s collateral value is a single USD value that represents the current value of all collateral in the account. It is used in leverage calculations and liquidation scenarios and is needed to determine margin.
Our collateral valuation model incorporates market liquidities and asset volatilities to determine the value each of your assets contribute towards the total collateral value. This often gives you a higher collateral value for leveraged trading than a simple “haircut” model, particularly for smaller positions.
Collateral Value is determined by the liquid assets held in a trading account. Liquid assets are those that are idle, held in spot open limit orders, spot AMM instructions and unsettled profits or losses denominated in that asset. The assets that are held in spot limit orders and AMM instructions are considered as part of the contribution towards collateral value on a trading account.
Collateral Tier
Collateral tiers determine what percentage of the notional value of an asset counts towards your total collateral value.
What does a collateral tier constitute?
A collateral tier is a list of assets in that tier, plus a list of bands. Each band shows a range of USD valuations and the collateral ratio applied for that range. Simply multiply the value you have in each band by the ratio for the band, and sum up the values.
If you prefer to think in terms of a haircut, the haircut is 1 - collateral ratio.
Example Collateral Tiers
| Tier Assets | USD Notional | Collateral Ratio |
|
Asset1, Asset2 |
0 to 100,000,000 | 100% |
| 100,000,000 to 300,000,000 | 90% | |
| Tier Assets | USD Notional | Collateral Ratio |
|
Asset3, Asset4 |
0 to 10,000,000 | 95% |
| 10,000,000 to 15,000,000 | 90% | |
| 15,000,000 to 35,000,000 | 85% | |
| Tier Assets | USD Notional | Collateral Ratio |
|
Asset5, Asset6, Asset7, Asset8 |
0 to 100,000 | 80% |
| 100,000 to 150,000 | 60% | |
| Tier Assets | USD Notional | Collateral Ratio |
|
Asset9, Asset10 |
0 to 10,000 | 60% |
Collateral Value Calculation Example 1:
Suppose you hold 200,000,000 USD worth of Asset1 and want to calculate its collateral value. Looking at the example tiers above, the first 100,000,000 USD is given 100 % value while the remaining 100,000,000 USD is discounted by 10%. The collateral value is thus 190,000,000 USD.
Calculated as follows: (100,000,000 * 100% + 100,000,000 * 90%) = 190,000,000.
Collateral Value Calculation Example 2:
Suppose you hold 20,000 USD worth of Asset9 and want to calculate its collateral value. Looking at the example tiers above, the first 10,000 USD is given 60 % value while the remaining 10,000 is given no value at all, because there are no more bands in that tier. The collateral value is thus 6,000 USD.
Calculated as follows: (10,000 * 60% + 10,000 * 0%) = 6,000.
Please refer to the Reference tab showing the collateral tiers for assets that are accepted as collateral on Bullish.
Viewing your collateral
To view your current collateral:
- On the left hand navigation, choose Portfolio.
-
By default, Overview should already be pre-selected. You will see the available collateral in USD.