Risk Ratio
The risk ratio marks the relative risk of the hAMM system.
At any moment, given the sum of total long positions
and the sum of total short positions
for all trading pairs, position pool
that stands for the all positions held can be illustrated as follows:
- is always positive,is always negative,is always positive.
The value of
determines the trading depth of the system.
The larger
is, the better liquidity and better risk capacity for that derivative.
The formula of risk ratio
is as follows:
- is always positive andis always negative.
- The sign ofmeans the direction of risk.
- andare total long or short positions for current derivative,andare total long or short positions for all trading pairs.
Position pool
is important to the risk control. When the value of
is large enough, although
, the total risk ratio is still rather limited. When the value of
is small, a normal value of
will significantly increase the risk ratio.
Position mining feature is designed to increase position pool.
Last modified 1yr ago