09. How to Use Bybit Insurance Fund

Leveraged trading on Bybit means that traders can apply up to 100x leverage to their trades when opening a position. However, a highly leveraged position may be liquidated and closed at a worse than bankruptcy price in a volatile market.

Bybit’s insurance fund is a reserve pool that the system can dip into in order to protect traders from negative equity and being held accountable for excessive loss. Assuming that a trader’s position has been liquidated, if the close price is better than the bankruptcy price, the trader’s remaining margin will be added to the insurance fund.

However, if the close price is worse than the bankruptcy price, the loss of the position will have exceeded the trader’s initial margin, whereupon the deficit will be covered by the insurance fund.

After opening a position, users can use the Bybit insurance fund located under [Mutual Insurance].