Cross-margin positions are a type of margin trading where an investor’s entire available balance across multiple assets is used as collateral for all open positions. This contrasts with isolated margin, where collateral is dedicated to a single position. The primary benefit of cross-margin is that it can prevent liquidation of individual positions by drawing on a broader pool of assets. However, it also means that a significant market move can risk the entire portfolio.
Context
News related to cross-margin positions in crypto often surfaces during periods of high market volatility, particularly concerning large liquidation events on derivatives exchanges. Debates exist regarding the risk management implications for traders, as the interconnected nature of collateral can lead to cascading liquidations. Exchanges frequently adjust their margin requirements and risk parameters, impacting how these positions are managed. Understanding these mechanics is vital for comprehending market dynamics during extreme price swings.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
