This is certainly a very useful capability within the DEX but to call it Risk Free is a stretch. Here is a chart of the price action on the DEX yesterday.
That spike equates to a roughly 40% swing in the price of BTS. Please make sure that YOU understand what you are doing if YOU choose to use this functionality. If your position is not sufficiently collateralized, you could be margin called and end up selling the BTS that you planned to HODL, at a very low price.
I usually keep my ratio between 4.2 and 5.5 - do you think that's safe enough?
I use 4, so from my perspective your numbers seem good. I look at the Call Price when setting up the loan and then check that against the chart to get a visual on whether a spike would likely reach that level.
Thanks! I appreciate your reply and explanation.