Cross-Margined Positions allow traders to use the entire balance across multiple positions as collateral for all open trades. This approach pools available margin, offering greater capital efficiency and flexibility. It means that profits from one position can offset losses in another, preventing premature liquidation. This method is common in derivatives trading platforms.
Context
In cryptocurrency trading, cross-margined positions are a frequent topic, especially concerning derivatives exchanges. News often analyzes how these margin systems impact trader risk and market volatility during rapid price swings. Understanding this concept is important for comprehending liquidation cascades and the broader market dynamics reported in crypto financial news. The choice between isolated and cross margin greatly affects trading strategies.
The crypto market experienced a sharp decline, with Bitcoin, Ethereum, and Dogecoin prices falling significantly after the US announced new tariffs on China, leading to record liquidations.
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