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?

Collateral Value

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 your assets contribute towards collateral. 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 asset held in a trading account. Liquid assets are those that are idle , held in open limit orders ,unsettled profits or losses denominated in that asset and spot AMM instructions.

Note: Only assets have collateral value. Derivative positions do not contribute to collateral. However unsettled profits or losses on derivative positions will affect your collateral value. 

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.

Below is an example of how a collateral tier would look. 

Tier Assets USD Notional  Collateral Ratio


Asset1

Asset2 

0-100,000,000 100%
100,000,000-300,000,000 90%
Tier Assets USD Notional  Collateral Ratio


Asset3

Asset4 

0-100,000,000 95%
100,000,000-300,000,000 90%
150,000,000-350,000,000 85%
Tier Assets USD Notional  Collateral Ratio


Asset5

Asset6

Asset7

Asset 8 

0-100,000,000 80%
100,000,000-150,000,000 60%
Tier Assets USD Notional  Collateral Ratio


Asset9

Asset10

0-100,000,000 60%
100,000,000-200,000,000 0%

 

Important: Collateral tiers are subject to change at any time.

Example: If a customer holds USD 200,000,000 of Asset1 as collateral, the first USD 100,000,000 is given 100 % value and the remaining USD 100,000,000 is discounted by 10%. The collateral value is thus USD 190,000,000.

Calculated as follows: (100,000,000 * 100% + 100,000,000 * 90%) = 190,000,000

Viewing your collateral

To view your current collateral:

  1. On the left hand navigation, choose Portfolio.
    Portfolio in lefthand navigation.png
  2. By default, Overview should already be pre-selected. You will see the available collateral in US dollars.
    Collateral value in Portfolio screen.png

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