Cross margin: why one loss can hit your other positions

The loss is on the left one. Why is the right one in danger too?

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.

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.

So cross margin is harder to liquidate, which makes it safer?

Extra money can delay when one position hits risk handling. But it also puts more of your money on the line for the losses.

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.

Not necessarily. It depends on the shared pool and the account rules.

Look at the whole pool, not just one position's box.

The price you watch hasn't hit the line, but the alarm is ringing. Next: who presses the liquidation button.

Understand first, then act.