Cross-Margin Strategy

A cross-margin strategy is a risk management approach where the entire balance of a user's account is used as collateral for all open positions. Unlike isolated margin, where collateral is assigned to a single trade, cross-margin allows profits from one position to offset losses from another.

While this can prevent premature liquidations, it also means that a single losing trade can drain the entire account balance if not carefully managed. This strategy requires a high level of sophistication and discipline, as the interconnected nature of the positions makes the account more sensitive to overall portfolio performance.

It is commonly used by professional traders to optimize capital efficiency and reduce the need for constant monitoring of individual trade margins.