Bybit Portfolio Margin Model: Risk Parameter Adjustment in 2025

Bybit has updated its Portfolio Margin Mode risk parameters in order to enhance capital efficiency and ensure robust risk management. Changes to the Underlying Price and Implied Volatility (IV) Stress Test Factors for BTC and ETH risk units took effect on Jan 10, 2025, at 8 AM UTC. These adjustments aim to align risk management strategies with evolving market dynamics.

Key Takeaways:

• Improved Capital Efficiency: Adjusted risk parameters aim to provide traders with lower margin requirements, while maintaining risk control.

• Enhanced Risk Management: Changes are based on comprehensive market analysis in order to adapt to current volatility and liquidity conditions.

• Strategic Adaptability: Traders can benefit from a more flexible approach to capital allocation that features improved purchasing power.

What Is Bybit Portfolio Margin Mode?

Bybit's Portfolio Margin Mode is a system that optimizes margin requirements by evaluating the overall risk of a trader’s portfolio, rather than assessing each position individually. This method enables traders to hold larger positions with lower margin requirements as compared to traditional systems.

For example, under the standard margin model, a $100,000 BTC position might require $10,000 in margin, while Portfolio Margin Mode could reduce this margin to $6,000–$8,000, freeing up capital for other investments.

What Is the Underlying Price Stress Test Factor Parameter?

The Underlying Price Stress Test Factor is a critical risk management parameter used in Bybit’s Portfolio Margin Mode to assess potential portfolio losses under extreme market conditions. It simulates various price fluctuation scenarios in order to evaluate how much adverse price movements could affect a portfolio.

For instance, prior to the 2025 update, BTC and ETH risk units were tested at stress levels of −15% to +15%. After the adjustment, the range has been narrowed to −10% to +10%, reflecting improved market stability.

This adjustment helps traders optimize capital efficiency, while simultaneously ensuring robust risk coverage.

What Is the Implied Volatility Stress Test Factor Parameter?

The Implied Volatility (IV) Stress Test Factor is a key parameter used in Bybit’s Portfolio Margin Mode to measure the potential impact of volatility fluctuations on a trader's portfolio. It evaluates the sensitivity of option prices to changes in implied volatility, helping traders anticipate potential risks during market swings.

Prior to the adjustment, the IV Stress Test Factor for BTC and ETH risk units ranged from −28% to +33%. The updated factor now falls between −20% and +24%, reflecting a more refined approach to market volatility.

Changes Made to Portfolio Margin Risk Parameters

Bybit has adjusted its Portfolio Margin risk parameters for BTC and ETH to better align with evolving market conditions. Changes include the following:

• Underlying Price Stress Test Factor: Previously set within a range of −15% to +15%, it’s now adjusted to a narrower range of −10% to +10%.

• Implied Volatility (IV) Stress Test Factor: Has been reduced from a range of −28% to +33% to a more controlled range of −20% to +24%.

These adjustments are based on an in-depth analysis of market trends observed in 2024, when fluctuations between bullish and bearish conditions — along with shifts in liquidity — highlighted the need for optimized risk parameters.

Bybit Portfolio Margin Calculation Formula

The Portfolio Margin is calculated using the following formula:

Portfolio Margin = Maximum Possible Loss + Contingency Loss

• Maximum Possible Loss accounts for price fluctuations, implied volatility changes and liquidity shifts.

• Contingency Loss factors in unexpected market moves, ensuring that margin levels are sufficient to cover 99.99% of potential risks.

This model provides traders with a solid risk management foundation while optimizing capital efficiency.

Case Study: ETH Derivative Contracts

Assuming a current ETHUSDC price of 3,400 USDC, the initial margin requirements before and after the parameter modification are as follows:

Conclusion

Bybit’s updated risk parameters are the result of a detailed analysis of market volatility, liquidity shifts and slippage data over the past year (2024). These changes are designed to enhance capital efficiency without compromising risk management.

For traders currently using the standard Portfolio Margin mode, switching to the combined margin mode could offer greater capital efficiency, particularly when managing complex portfolios of futures and options. This provides traders the opportunity to enhance flexibility and maximize returns while maintaining appropriate risk coverage.

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