Technical Definition

Cross Margin

Cross margin is a margin mode where multiple positions can draw on a shared pool of eligible account collateral.

By Crypto University Editorial
MarginIsolated MarginLiquidation

✦ Key Insight

It changes liquidation risk because collateral is shared rather than isolated to one position.

✕ Common Misconceptions

Cross margin can expose more of the account balance than an isolated position would.

Detailed Explanation

Unused collateral or gains elsewhere can support a losing position, but one bad position can also expose more of the account.

In Practice

“A losing BTC perpetual uses collateral that also supports an ETH position in the same cross-margin account.”

Dig Deeper

Isolated Margin

Isolated margin is a margin mode in which collateral allocated to one leveraged position is separated from the rest of an account's available collateral.

Margin

Margin is capital deposited or maintained to support a leveraged trading position.

Portfolio

A portfolio is the collection of assets, positions, and investments held by a person or organization.

Liquidation

Liquidation is the forced reduction or closure of a leveraged or collateralized position when required risk or collateral thresholds are breached.

Leverage

Leverage allows a trader to control a position larger than the capital committed to support it.