Introduction to Cross Margin Trading
Cross margin trading is an advanced feature that allows traders to utilize their assets across multiple trading products simultaneously. In this mode, users can trade spot, margin, futures, perpetual swaps, and options while sharing the same collateral pool for positions settled with the same cryptocurrency.
👉 Master cross margin trading strategies
Key characteristics of cross margin mode:
– Unified margin pool for all positions in the same settlement currency
– Profit and loss offsetting across different position types
– Efficient capital utilization but with shared risk exposure
Unlike isolated margin mode where each position’s risk is segregated, cross margin mode measures risk collectively. If equity for a particular cryptocurrency becomes insufficient, it may trigger partial or full liquidation of all positions settled with that asset.
Understanding Account Balances and Metrics
Critical Asset Fields Explained
| Term | Definition | API Parameter |
|---|---|---|
| Equity | Total account value including floating PnL from all positions | eq |
| Free Margin | Available crypto for new trades in cross margin products | availEq |
| Available Balance | Crypto available for isolated positions, spot, and long options | availBal |
| In Use | Crypto locked in open orders or existing positions | frozenBal |
| Floating PnL | Unrealized profit/loss across all positions | upl |
| Leverage | Position value relative to available equity | notionalLever |
| Maintenance Ratio | Risk indicator for asset health | mgnRatio |
| Total Equity | USD value of all cryptocurrency holdings | eqUsd |
Margin Calculations
Leverage computation varies by product type:
– Futures: position value = face value × contracts × multiplier / mark price
– Margin: depends on base/quote currency selection
– Options: position value = face value × contracts × multiplier
👉 Calculate your margin requirements
Trading Rules and Position Management
Cross Margin vs. Isolated Margin
- Cross Margin: Shared collateral pool allows offsetting PnL
- Isolated Margin: Positions maintain separate risk profiles
Order Validation Logic
For cross margin trades:
1. Futures/options shorts require sufficient free margin
2. Spot/options longs need adequate available balance
Example Scenario:
– BTC balance: 700
– In use: 530
– Floating PnL: +15
– Free margin: 185
– Order requiring 200 margin would fail
Position Types in Cross Margin Mode
Margin Positions
| Field | Description | API Parameter |
|---|---|---|
| Assets | Positive position value | pos |
| Liability | Outstanding borrowings | liab |
| Liquidation Price | Risk threshold reference | liqPx |
| Initial Margin | Collateral required | imr |
Closing Strategies:
1. Market close all
2. Limit orders
3. Reduce only + reverse positions
Futures Positions
Key differences for futures:
– Supports both hedge and one-way modes
– Crypto/USDT margined calculations differ
– Maintenance margin based on position tiers
Options Positions
Unique aspects:
– No margin for long positions
– Short options require specific margin calculations
– Delta considerations for risk management
Risk Management Framework
Two-Tier Protection System
- Risk Control Cancellations:
- Triggered when available equity nears maintenance requirements
-
Cancels risk-increasing orders preemptively
-
Pre-Liquidation Verification:
- Occurs when maintenance ratio ≤ 100%
- Cancels open orders before liquidation
- Three-phase liquidation process
Liquidation Phases:
1. Offset opposing positions in hedge mode
2. Delta-neutral position reduction
3. Unhedged position liquidation
Frequently Asked Questions
What’s the main advantage of cross margin trading?
Cross margin allows capital efficiency by sharing collateral across positions, enabling greater trading flexibility and PnL offsetting.
How is liquidation risk different in cross margin?
All positions sharing the same settlement currency are collectively at risk, unlike isolated margin where only specific positions are liquidated.
Can I switch between cross and isolated margin?
Yes, but position transfers between modes may require meeting specific margin requirements for the target mode.
What happens during partial liquidation?
The system liquidates portions of positions following a three-phase approach to restore account health while minimizing market impact.
How are options treated differently in cross margin?
Long options don’t require margin but short options have complex margin calculations considering volatility and Greeks.
What’s the best strategy to avoid liquidation?
Maintain adequate equity buffers, monitor maintenance ratios, and use stop-loss orders strategically while understanding position correlations.