Season 1Episode 222:36
Cross margin: why one loss can hit your other positions
Your next step
Get new lessons and beginner checklists in our Telegram channel.
Key takeaways
Cross margin shares one margin pool across positions.
One losing position can eat the buffer the others rely on.
It does not reach your bank cards or personal wallets.
Quick check
Is cross margin automatically safer?
Try it yourself
Let one virtual position lose, watch how risk changes across the same pool, and circle the assets that are not in this margin pool.
Show the answer
Risk can spread across the same margin pool. It doesn't automatically cover all your personal assets.
Transcript
- Sam
The loss is on the left one. Why is the right one in danger too?
- Nexubo
Cross margin shares margin across positions, within what the rules allow. Here, say one margin pool holds 1,000. Several positions may depend on it, not just on what each was first assigned.
- Narrator
One losing position can eat the buffer other positions rely on. Profits, losses, margin held for open orders, and the value of your collateral can all affect the same account's risk.
- Sam
So cross margin is harder to liquidate, which makes it safer?
- Nexubo
Extra money can delay when one position hits risk handling. But it also puts more of your money on the line for the losses.
- Narrator
Cross margin doesn't let a platform automatically use all your bank cards or personal wallets. Which accounts and collateral count depends on the product rules. Complex collateral can also come with haircuts and its own price risk.
- Sam
Not necessarily. It depends on the shared pool and the account rules.
- Nexubo
Look at the whole pool, not just one position's box.
- Narrator
The price you watch hasn't hit the line, but the alarm is ringing. Next: who presses the liquidation button.
- Narrator
Understand first, then act.