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Anyone with even the most basic familiarity with margin trades knows that the greatest risk in leveraged trading is the risk of position liquidation. Bybit EU’s Unified Trading Account (UTA) is designed to minimize this risk, and to allow you to get the most out of your Spot Margin trades. With a consolidated portfolio view, unified execution environment and flexible margin management modes, the UTA is an indispensable tool for a Spot Margin trader.
In this article, we’ll cover the key topics related to effective risk management via your Bybit EU UTA, including the account’s features and benefits, margin modes, borrowing terms, liquidation scenarios — and some common pitfalls to avoid when trading on margin.
Key Takeaways:
The Bybit EU UTA is a multi-purpose trading account that allows you to place Spot and Spot Margin trades, and to actively manage your margin trading strategy to minimize inefficiencies and liquidation risks.
Your UTA’s consolidated portfolio view, unified execution environment, versatile margin management options and differential collateral value ratios help you optimize your Spot Margin strategy.
The account’s two margin management modes for Spot margin trading — Cross and Portfolio — allocate liquidation and margin risks differently so you can choose the mode most aligned with your risk tolerance and trading strategy.
The Unified Trading Account (UTA) is a multi-purpose trading account that all Bybit EU users receive upon signing up for the platform. Your UTA has multi-asset support, and is the primary account through which you can place your Spot and Spot Margin trades on Bybit. While your Funding Account is mainly used for deposits and withdrawals, the UTA serves as your key trading engine. It lets you place trades, set collateral assets, contribute funds to satisfy margin requirements and use the Convert function for fee-free asset swaps. You can also freely transfer funds between your UTA and Funding Account with near-instant execution times.
Your UTA supports dozens of assets, of which around 30 can be set as collateral for your Spot Margin trades. Among the assets eligible for collateral under the UTA are high-cap coins like USDC (USDC), Bitcoin (BTC), Ether (ETH) and Solana (SOL); mid-cap cryptos like Litecoin (LTC), Avalanche (AVAX) and Mantle (MNT); and several popular meme coins like Pepe (PEPE) and Popcat (POPCAT). The euro fiat currency is also among the assets supported for collateral.
Your Bybit EU UTA provides a number of benefits for risk management, thanks to its unified structure, multi-asset support and efficient collateral deployment.
The UTA’s key feature is its consolidated portfolio view of all of your assets and open positions. As you trade and hold assets, your balances are represented in a calculated USD equivalent, giving you an overview of your account’s health and performance. The USD equivalent of your assets is calculated based on the following basic formula:
Total asset value (in USD) = Number of assets × USD Index Price × conversion ratio
Each asset in your UTA has a different applicable conversion ratio in the formula above. For instance, the conversion ratio for USDC is always 100%, meaning that the entirety of your USDC holdings is used for the calculation of your equity under the account. Conversion ratios for assets like BTC and ETH are typically 98% and 95%, respectively.
Thanks to the unified portfolio view, all of your balances, P&L, liabilities and exposure are taken into account and presented in USD-equivalent values. This helps you keep track of your overall performance in a way that’s clear and easy to understand.
Another benefit of the UTA is the ability to place all of your Spot and Spot Margin trades, set collateral assets and hold coins within the same account. This frees you from the necessity to continually transfer funds between accounts, which in turn reduces manual errors and makes it easier and simpler to track orders.
Assets in your UTA are automatically converted into their effective margin value, and are made available for your trades based on the conversion rates mentioned in the formula above. These conversion ratios are also referred to as Collateral Value Ratios (CVRs). For some assets, CVRs may differ depending upon the order quantity, while for others the ratios remain fixed regardless of the amount traded.
The system automatically calculates CVRs for your UTA assets, derives margin values for each assent and then sums it all up, providing a unified, account-wide margin measure. This leads to efficient collateral utilization, and can help support leveraged positions under stress by contributing available margin to prop them up.
There are two critical concepts related to your UTA to always be aware of: margin balance and available balance. Margin balance refers to the total margin, based on all of your assets after adjusting for their CVRs plus your unrealized PnL. On the other hand, available balance represents the portion of your margin balance that you can use to place a trade. In other words, your available balance indicates the margin amount that’s not yet dedicated to open positions.
When your margin balance falls below the maintenance margin (MM) level, liquidation is triggered. Your available balance serves as a buffer for your position safety, and can be utilized to allocate margin to open positions that are vulnerable to liquidation.
Assets in your UTA typically have different CVR values applied to them. For example, USDC’s value is always 100%, but the CVR for Shiba Inu (SHIB) is 85% — meaning that for each 100 USD-equivalent of SHIB you hold in your account, only 85 USD-equivalent is counted as usable collateral.
The differential CVRs are due to factors such as price volatility, liquidity and risk levels associated with each asset. Highly stable assets with significant liquidity — such as established high-cap stablecoins — typically have high CVRs, while volatile assets with relatively lower liquidity tend to feature lower CVR values.
You can easily view up-to-date CVR values for all assets by following the steps below:
Step 1: Visit the Bybit EU homepage, log in to your account, hover over Trade in the top menu, then hover over Spot and click on any spot pair in the list. It doesn’t matter which pair you choose; you only need to select a pair to load the trading interface.
Step 2: In the trading interface, click on the book icon located around the top of the screen, just to the left of the order panel.
Step 3: In the Trading Guide screen, click on Margin Data.
Step 4: In the Margin Trading page, select the Margin Specifications tab. You’ll then be able to view the CVRs (in the Multiplier column) of all assets offered by Bybit.
Unified Trading Account has three margin modes, Isolated, Cross and Portfolio, but only Cross and Portfolio support Spot margin trading.
Cross Margin mode utilizes your entire account-wide margin balance to help you avoid liquidations across your open positions. It helps smooth equity across positions, and provides the flexibility of using your total margin to save endangered positions.
When you have multiple positions with very different risk levels, the use of Cross Margin mode also helps diversify the overall risk — for example, by letting you quickly allocate margins from safer to more volatile positions.
Portfolio Margin mode operates similarly to Cross Margin mode in that it can utilize your account-wide margin to shore up positions across the board. However, it comes with an enhanced calculation logic to attribute aggregate risk estimates to your account. This mode is designed for active traders who are knowledgeable about aggregate risks in account-wide margin trading.
Borrowing on margin carries its own risks, and comes with certain fees that you need to account for. First, when you place trades for pairs where Spot Margin is available, and your balance doesn’t have funds to cover the requested quantity, your account will automatically auto-borrow the required funds. This function is enabled by default.
Secondly, when you open Spot Margin positions, you pay two kinds of fees. One is the standard Spot transaction fee of 0.1% (for non-VIP users) of the filled order quantity. The other is the fee on the amount you’ve borrowed. This fee is charged on an hourly basis for each hour you hold the loan from the platform.
Naturally, borrowing on margin also significantly increases your risk exposure. By utilizing margins to trade on leverage, you amplify both the risks and potential rewards associated with your trading. Therefore, the presence of both the risks involved and the borrowing costs applied on an hourly basis means that you must carefully monitor and actively manage your margin-based positions.
You always have the option to repay your liabilities manually. In fact, if you see that your account might be nearing the maintenance margin rate (MMR) of 100%, you should manually repay your debts to reduce liquidation risks.
Two scenarios will trigger auto repayment:
1) If your MMR hits 100%, your positions will automatically be liquidated, and the auto repayment process will begin until your liabilities are fully repaid, with a 2% handling fee.
2) If your borrowing exceeds the limits applicable to you, the auto repayment process will start, and will last until the borrowed amount is reduced to 90% of the maximum borrowing limit (with a 1% repayment handling fee). You’ll be paying a penalty borrowing fee every hour that your position remains above the limit. Your individual borrowing limits are determined as the lowest value of three factors:
the limit of your account tier
the position tier for the specific coin borrowed
available liquidity in the respective borrowing pool
You can check coin-specific borrowing limits under the Position tiers tab on the Margin Trading page (see the Collateral Value Ratios section above for info on how to access the page).
In order to avoid liquidation and paying penalty borrowing fees, it’s important that you manually monitor your open positions as frequently as possible.
To prevent liquidation of your positions, it’s highly advisable to adopt the following approaches.
Track your MMR carefully at all times. If you see this indicator approaching the dangerous 100% level, pay down your liabilities, try to close positions at risk and commit more collateral to prop up your overall account performance.
If you have some isolated positions at risk, and have sufficient overall margin to commit to propping them up, ensure that you’re using Cross Margin mode. If you stay in Isolated mode, you might not be able to use such functionality.
In turn, if a significant proportion of your positions are at risk, consider trading in Isolated mode to avoid a situation in which losses in one trade trigger a chain of cascading position liquidations.
To solidify your collateral position as much as possible, prioritize assets with high CVRs and stable value. Prime examples are highly established stablecoins such as USDC.
Additionally, closing some profitable positions to convert unrealized profit into usable balance can also help your overall account health.
When using your UTA for trading, it’s also crucial to avoid some common mistakes, such as ignoring or not frequently tracking your MMR, overusing borrowed funds, misunderstanding or not carefully checking up-to-date CVRs and assuming that liquidation is something akin to a stop-loss situation. Unlike a stop-loss order, which is designed to limit your losses and save your capital, liquidation is a far less pleasant outcome that wipes out both your position and margin.
Liquidation risk and inefficient margin allocation are among the primary causes of losses in margin trading. Bybit EU’s UTA is explicitly designed to address these issues by allowing you to flexibly choose your preferred margin settings and transparently track your performance. For a Spot Margin trader, the UTA provides critical tools to minimize their liquidation risk and optimize their strategy, such as a versatile set of margin modes, a consolidated portfolio view in USD-equivalent values, a unified execution environment and asset risk-adjusted CVRs.
To manage risk effectively, take the time to learn about your UTA’s risk tools, collateral options, CVR system, multi-asset features and available margin modes.
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