Skip to content

Cross Margin

Give me the basics

Cross Margin is a margin trading method where a trader uses all the funds in their account as collateral for a leveraged position. It means that if the price moves against the trader, their entire account balance could be liquidated. On the other hand, if the price moves in favor of the trader, they could realize larger profits than with a lower margin.

In-depth explanation

Cross Margin is a term used in margin trading, which is a process where traders borrow funds from an exchange to trade cryptocurrencies with leverage. In simple terms, margin trading allows traders to increase their potential profit by borrowing funds to invest in more assets than they could with their own capital. Cross Margin is a method of calculating margin that considers a trader’s entire account balance rather than just the amount they are using to open a position. This means that if a trader’s account balance falls below the required maintenance margin, the exchange will use their available funds to cover the loss before liquidating their position. This provides a higher level of protection for the trader’s assets, reducing the risk of a margin call.