Cross Margin (Derivatives Trading)

Cross margin, sometimes referred to as spread margin, is a margin trading strategy that utilizes the entirety of the available account balance to safeguard against liquidations. It enables the realized profits and losses to contribute to the margin of a losing position. Cross margin trading is advantageous for users engaged in hedging existing positions or for arbitrageurs seeking to minimize exposure to the losing side of a trade in the event of liquidation. It should be noted that cross margin trading differs from isolated margin trading, which allocates isolated portions of the account balance for each individual trade.