The **risk ratio** marks the relative risk of the hAMM system.

At any moment, given the sum of total long positions $X_{all}$ and the sum of total short positions $Y_{all}$ for all derivatives, **position pool** $P$ that stands for the all positions held can be illustrated as follows:

$P=X_{all}-Y_{all}$

$X$

*is always positive,*$Y$*is always negative,*$P$*is always positive.*

The value of $P$ determines the **trading depth** of a certain derivative.

The larger $P$ is, the better liquidity and better risk capacity for that derivative.

The formula of **risk ratio** $V_{ratio}$ is as follows:

$V_{ratio}=\dfrac{N_c}{P}=\dfrac{X_c+Y_c}{X_{all}-Y_{all}}$

$X$

*is always positive and*$Y$*is always negative.**The sign of*$V_{ratio}$*means the direction of risk.***$X_c$*and*$Y_c$*are total long or short positions for current derivative,*$X_{all}$*and*$Y_{all}$*are total long or short positions for all derivatives.*

Position pool $P$ is important to the risk control. When the value of $P$ is large enough, although $N\neq0$, the total risk ratio is still rather limited. When the value of $P$ is small, a normal value of $N$ will significantly increase the risk ratio.

Position mining feature is designed to **increase position pool**.