Risk Limits

Overview

ZT imposes risk limits on all trading accounts to minimise the occurrence of large liquidations on margined contracts.

As users amass larger positions or fat finger, they pose a risk to others on the exchange who may experience a deleveraging event if the position cannot be fully liquidated. The Step model helps avoid this by increasing margin requirements for large positions.

ZT will dynamically adjust the risk limit according to market conditions, trying to meet the needs of all traders, and all updates will be announced in time. 

If you have a special claim for the risk limit, for example, if one or more of the following reasons exist, please contact us in time and we will adjust the appropriate risk limit for you；

• Programmatic trading using a market maker strategy
• Have a lot of hedging needs
• Manage large amounts of money

Dynamic Risk Limits

Each instrument has a Basic Risk Limit and Step. These numbers combined with the base Maintenance and Initial Margin requirements are used to calculate your full margin requirement at each position size.

As the position size increases, the maintenance and initial margin requirements will increase. Users must authorize a higher or lower risk limit on the Positions panel. Margin requirements will automatically increase and decrease as your risk limit changes.

Formulas

Position limit

To control extreme risks, ZT will set a position limit for all contracts, and positions that exceed the position limit will be charged at 100%. The margin risk limit table for each contract is attached.

Single order quantity

To avoid the unpredictable impact of fat finger-like events on the market, ZT limits the number of orders per order, and orders that exceed the limit will not be submitted.

Number of outstanding orders - normal order

A commission that is not for a transaction will dramatically increase the number of outstanding orders in the system, and ZT will allow each user to have 20 unfilled orders on each contract.

Number of outstanding orders - conditional order

A commission that is not for a transaction will dramatically increase the number of outstanding orders in the system. ZT will allow each user to have 5 uncompleted condition orders (including stop loss and take profit orders) on each contract.

Annex 1: ZT Margin Risk Limit Table:

Annex 2: ZT Risk Limit Table:

All English manuscripts are translated versions of the Chinese manuscripts, and all contents are subject to the Chinese manuscript. Thank you.