Cross Margin

Cross margin describes how collateral is shared across an account rather than tied to a single trade. Instead of setting aside a fixed amount for each position, the exchange pools the entire margin balance and applies it wherever it is needed, so a profitable position can effectively subsidize a losing one within the same account.

The mechanics matter because the liquidation price is not fixed. It shifts continuously as the account's wallet balance, unrealized profit and loss, and funding payments change. On most derivatives platforms, liquidation is calculated against the mark price rather than the last traded price, specifically to reduce the impact of thin order books or brief price spikes. A trader running several positions at once will see each one's liquidation level move as the others gain or lose value, and even an unrelated action, such as withdrawing funds, can push a liquidation price closer.

Cross margin is popular with traders who run hedged or multi-position strategies, for example holding a long position in one asset like Bitcoin alongside a short in another, because gains on one leg can offset losses on the other without manual rebalancing. It is also more capital efficient than funding several isolated positions separately.

The tradeoff is concentration risk: because the whole account backs every open trade, a single adverse move combined with high leverage can wipe out the full balance rather than just the capital allocated to one bad trade. For this reason, many exchanges let traders switch between cross and isolated modes per position, and risk-conscious traders often reserve cross margin for hedged books while isolating experimental or high-leverage trades.