Introduction to Cross Margin Trading
Multi-currency cross-margin mode enables traders to access diverse instruments—including spot, margin, futures, and options—using a unified trading account. Assets deposited are converted to USD value for margin calculations, streamlining position management across markets.
👉 Master cross-margin trading strategies
Auto-Borrow Mechanism: When enabled, this feature allows:
- Trading even with insufficient currency-specific equity if USD-adjusted equity suffices
- Automatic liability generation for oversold currencies or derivative losses
- Interest accrual only on negative equity exceeding interest-free limits
Core Concepts Simplified
Currency-Level Metrics
| Term | Definition | Impact |
|---|---|---|
| Balance | Total currency holdings | Base for equity calculations |
| Floating PnL | Unrealized gains/losses | Affects real-time equity |
| Available Equity | Usable funds after frozen amounts | Determines order placement capacity |
| Liability | Debt from negative equity | Triggers interest if beyond free limit |
Example Scenario:
- Portfolio: 2 BTC ($100k/BTC), 6,000 SOL ($200/SOL), 100k USDT
- Action: BTC perpetual long (0.5 BTC, 10x leverage)
- Outcome: $10k profit at $100k mark price increases USDT equity to $110k
Account-Wide Calculations
| Metric | Formula | Purpose |
|---|---|---|
| Adjusted Equity | ∑(Currency equity × Discount rate × USD price) | Measures usable collateral |
| Maintenance Margin | ∑(Position value × Tier requirement) | Determines liquidation risk |
| Account Leverage | Position value / Adjusted equity | Reflects risk exposure |
Discount Rate Application:
BTC holdings (100 BTC @ $60k) receive tiered discounts (0.98-0.95), reducing $6M equity to $5.785M adjusted value.
Trading Protocols
Auto-Borrow vs. Standard Mode
| Feature | Auto-Borrow Enabled | Auto-Borrow Disabled |
|---|---|---|
| Order Placement | Allows potential borrowing | Requires sufficient available balance |
| Interest | Charged beyond free limit | N/A |
| Risk Control | Forced repayment triggers | Stricter equity checks |
Practical Cases:
- Spot Trading: Selling 120k USDT with only 110k balance succeeds in auto-borrow (generating 10k liability) but fails in standard mode.
- Futures Order: 200k USDT position requires adjusted equity check—approved if ≥1.445M USD.
Risk Management Framework
Two-Tier Safety System
Order Cancellation Assessment
- Cancels partial orders when:
Adjusted margin < Maintenance + Order requirements - Preserves account stability before liquidation threshold
- Cancels partial orders when:
Pre-Liquidation Process
Triggers at ≤100% maintenance margin ratio:
- Cancels all cross-margin orders
- Preserves isolated position close orders
Executes three-phase liquidation:
- Hedge position offsets
- Delta-neutral reductions
- Unhedged position cuts
👉 Understand liquidation risks
Liquidation Example:
- Account with 3 BTC, 10 ETH, and mixed futures/options
- Phase 1: Offsets BTCUSD0925 longs with BTCUSD-C shorts
- Phase 2: Balances remaining delta positions
- Phase 3: Prioritizes high-impact position reductions
Frequently Asked Questions
How does multi-currency margin differ from single-currency?
It aggregates all assets' USD value for margin, enabling cross-collateralization without manual currency conversions.
What triggers forced liquidation?
When maintenance margin ratio hits 100%, the system cancels orders and liquidates positions until the ratio improves.
Are there interest charges in auto-borrow mode?
Only on negative equity exceeding your interest-free limit (varies by currency).
How are discount rates applied?
Tiered discounts reduce asset values for risk mitigation. Higher tiers = lower rates.
Can I prevent potential borrowing?
Yes—disable auto-borrow mode to restrict trading to available balances only.
What happens during partial liquidation?
Positions are reduced systematically: hedge offsets first, then delta balancing, finally unhedged cuts.
Risk Disclosure: Cross-margin trading amplifies both gains and losses. Monitor your maintenance margin ratio closely and consider risk management tools like stop-loss orders. This content is educational only—always assess your risk tolerance before trading.