Cross-Margin Logic

Cross-margin logic is a system where the collateral from all positions in an account is aggregated to prevent the liquidation of any single position as long as the total account value remains above the maintenance requirement. This is in contrast to isolated-margin, where each position is treated independently.

Cross-margin is more capital efficient for the trader, as it allows them to use the profits from one position to offset the losses of another. However, it also means that a single losing position can potentially wipe out the entire account balance.

The logic must be robust to correctly calculate the aggregate risk and ensure that the system is never exposed to a deficit. This requires sophisticated real-time monitoring and calculation, as the risk profile of the entire account changes with every price movement.

It is a popular feature among professional traders who want to optimize their capital usage, but it requires a higher level of risk management expertise.