# Borrowing Power ### **Understanding Borrowing Power** Borrowing power is primarily determined by the Loan-to-Value ratio. Each collateral asset has a predefined [LTV](/introduction/key-metrics-and-parameters/risk-metrics.md#loan-to-value-ltv), which sets the maximum borrowing capacity using that asset. ### **Balancing Opportunity and Risk** Pike enables users to leverage their collateral to borrow assets. While maximizing borrowing power can enhance opportunities, it also introduces risk. Understanding and managing this balance is crucial to maintaining a safe position. ### **Managing Risk While Maximizing Borrowing Power** Mitigating risk while optimizing borrowing power involves strategic planning and active management of your position. * **Borrow Conservatively:** Avoid borrowing close to the LTV to maintain a safe Health Factor. * **Monitor Regularly:** Use the dashboard to track your Health Factor and overall risk metrics continuously. * **Act Decisively:** If market volatility impacts your position, supply additional collateral or repay borrowed assets promptly. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.pike.finance/risk-management/borrowing-power.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.