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What is cross margin?
Cross margin is a setting on leveraged trading platforms where all open positions share one pool of collateral, the account's available balance. A loss on one position can be covered by free funds or gains elsewhere, but a large enough loss can drain the whole account.
What it means for you
Under cross margin, one position going badly wrong can liquidate everything, because the platform draws on your whole balance before closing it. It can keep a position open through a move that would close an isolated one, but the amount at risk is the full account, not one trade.
How it works
With cross-margining, collateral is pooled across positions in different assets, so liquidation decisions become coupled: the exchange looks at the account as a whole. Positions that offset each other can lower the account's overall risk, which is why judging each position by its gross leverage alone can mislead. When a large price move leaves losses bigger than the margin and other resources available, exchanges can share the shortfall by reducing other accounts' positions through auto-deleveraging.
An example
Say your account holds $1,000 with two leveraged positions under cross margin. If one loses $700, the platform keeps it open using the shared balance. If losses keep growing past what the account can cover, both positions can be closed and the whole $1,000 lost.
Source: Campbell, Hey, Moallemi and Nutz: Risk-Based Auto-Deleveraging (arXiv) · checked 4 October 2026
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