What is Auto-Exchange?

Auto-Exchange is a risk management mechanism designed to ensure that your USDT-M Futures account balance doesn't fall below a certain threshold.

When the threshold is reached, Auto-Exchange converts your BTC and ETH in your USDT-M Futures account proportionally at the market price.

 

In the Multi-Assets Collateral mode, Auto-Exchange will be triggered in the following four situations:

1. When your USDT equity falls below the Auto-Exchange threshold for USDT.
2. When your wallet balance is insufficient to cover the deficit during a liquidation.
3. When your USDT equity is negative and you have no open positions or orders.

For example, when an individual user’s USDT balance is -5,000 USDT, Auto-Exchange will be triggered. Assuming BTC has an Auto-Exchange haircut of 2.5%, 5,128.20 USDT (=the calculation would be: 5,000 USDT / 97.5%) equivalent in BTC will be automatically converted to USDT and counted toward the wallet balance.

4. When your LTV ratio reaches the threshold.

 

When LTV ≥0.995, Auto-Exchange will be triggered.

Note: LTV = abs(∑Negative assets of your USDT-M Futures account in USD value in the multi-assets collateral mode * (1 + Auto-Exchange haircut)) / ∑Positive assets of your USDT-M Futures account in USD value in the multi-assets collateral mode * (1 - Auto-Exchange haircut)

 

Example:

Assume you’re trading in the Multi-Assets Collateral mode. Your USDT-M Futures account has a 1 BTC (i.e. 60,000 USDT in equity) and a zero USDT balance. You open an ETHUSDT perpetual contract with a position size of 50,000 USDT in the cross margin mode. There is an Auto-Exchange haircut of 0.05 for BTC and 0.01 for USDT, and the LTV threshold is 99.5%.

Scenario 1: When your floating PnL of ETHUSDT positions reaches 10,000 USDT, your current LTV ratio will become 17.71% (= abs (-10,000) * (1+0.01) / 60,000 * (1-0.0)). Since the LTV ratio is less than the threshold, a conversion will not be triggered.

Scenario 2: When your BTC equity is now 10,000 USD due to its price decrease. Your current LTV ratio will become 106.31% (= abs (-10,000) * (1 + 0.01) / 10,000 * (1 - 0.05)). Since the LTV ratio exceeds the threshold of 99.5%, a conversion is triggered.

 

To avoid triggering Auto-Exchange, you can transfer or convert spot assets to your USDT-M Futures account to maintain the negative balance below the -10,000 USDT threshold. If you don't have any open positions or orders and there is a deficit in your USDT-M Futures account, you are advised to convert or transfer sufficient spot assets to the USDT-M Futures account in a timely manner to prevent the LTV from going above 0.995, which would trigger Auto-Exchange.

To reduce risks, HTX may temporarily adjust the Auto-Exchange threshold and execute the conversion automatically. You may notice that the balance of a certain asset in your USDT-M Futures account is negative. However, this does not necessarily mean the balance of your USDT-M Futures account is at a loss.

 

Note: In the event there are multiple collateral assets under the Multi-Assets Collateral mode, when Auto-Exchange is triggered, they will be automatically converted to negative assets according to the proportion of each collateral. In order to avoid the loss from Auto-Exchange, you can transfer or exchange independently before reaching the Auto-Exchange threshold (provided that you have no open positions or orders).

 

HTX Team

May 8, 2025

 

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