Cross margin
Also called: cross mode · cross margin mode
Definition
Cross margin is a margin mode where all your open positions share the available balance in your account as collateral, so profits and spare funds can absorb losses before liquidation.
How cross margin works
In cross mode the exchange does not ring-fence collateral per trade. Your whole available balance in that account, plus unrealized profit from winning positions, supports every open position. This gives a losing trade more room, so its liquidation price sits further away than in isolated mode with the same funds.
The downside is shared risk. If one position keeps losing, it draws on the entire balance. When the account can no longer meet the total maintenance margin, positions are liquidated and you can lose far more than the margin you had in mind for that single trade.
Cross margin suits traders who hold related or hedged positions, or who actively manage their total exposure. Many exchanges now offer unified or multi-asset accounts where cross margin can also count other coins as collateral, with haircuts on their value. Rules for which assets count and how they are valued differ by exchange.
Example
Suppose your account holds 3,000 USDT and you open a 10x long worth 5,000 USDT in cross mode, using 500 USDT as initial margin. In isolated mode, a drop of about 10% would liquidate it. In cross mode, the full 3,000 USDT backs it, so the price would need to fall roughly 59% before the 3,000 USDT is used up, ignoring fees and maintenance margin. If that happened, you would lose almost all 3,000 USDT, not just 500.
Common mistakes
- Thinking you only risk the initial margin of a trade when the account is in cross mode.
- Keeping a large idle balance in a cross margin account that should have stayed in spot or savings.
- Forgetting that a new position in cross mode changes the liquidation price of the others.
Learn and practise
FAQ
Is cross margin riskier than isolated margin?
It delays liquidation but puts your whole balance on the line. Isolated caps the loss per position; cross can lose everything in the account.
When does cross margin make sense?
It is useful when you run hedged or offsetting positions and monitor total exposure. For single directional bets, many traders prefer isolated margin.