Risk management is something Deribit takes very seriously. Events causing volatile moves in asset prices can have an amplified effect on the profit/loss of traders with positions in leveraged derivative products. Cryptocurrency markets are certainly no stranger to events like this, so it is important that Deribit maintains a system that can cope with them, both from a technology standpoint and by ensuring sufficient margin requirements are met for traders positions.
When extreme events happen, traders need to be confident they will be able to make any adjustments to their positions easily, and also that they will be paid in full when their trades go well. Deribit ensures this is the case by:
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Using the latest technologies to create the most performant platform possible. This includes frequent updates to the existing platform, and assessing the suitability of new software and hardware technologies.
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Having an advanced incremental auto-liquidation system. This ensures that when a trader fails to meet the margin requirements for their positions, the positions are closed in an orderly manner. For more information, see Liquidations.
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Maintaining an insurance fund that can be used to cover any remaining negative equity on occasions where an account is left bankrupt even after liquidations. This ensures the winning side of the trade gets paid in full. For more information, see Insurance Fund.
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Actively monitoring risk limits and margin requirements, and making adjustments to parameters where necessary.