Introduction to Cross Margin Trading
In multi-currency cross-margin mode, traders can access all trading instruments—including spot, margin, futures, perpetual contracts, and options—using their deposited assets. The system calculates margin requirements based on the USD-equivalent value of these assets.
Key features include:
- Auto-Borrow Functionality: Enables trading even with insufficient currency balances if overall USD equity meets requirements
- Risk Management: Positions are evaluated collectively in USD; liquidation occurs when adjusted equity falls below maintenance margin thresholds
- Flexible Trading: Risks can be isolated by using positions in isolated margin mode
Core Concepts and Calculations
Currency-Level Metrics
| Term | Definition | Calculation | API Parameter |
|---|---|---|---|
| Balance | Total currency assets | N/A | cashBal |
| Floating PnL | Unrealized PnL for currency-settled positions | Sum of futures/options PnL | N/A |
| Equity | Current currency value | Balance + Floating PnL + Options value - Interest | N/A |
| Available Equity | Usable funds | Max(0, Equity - Frozen equity) | availEq |
| Liability | Debt obligations | Absolute value of negative equity + Isolated liabilities | liab |
Practical Example
Asset Holdings:
- BTC: 2 (Price: $80,000)
- SOL: 6,000 (Price: $200)
- USDT: 100,000
After Position:
- BTC-USDT perpetual long: 0.5 BTC at $80,000 (10x leverage)
- Price rises to $100,000 → $10,000 unrealized profit
Resulting Balances:
| Currency | Equity |
|---|---|
| BTC | 2 |
| SOL | 6,000 |
| USDT | 110,000 |
Account-Level Calculations
Key Formulas
| Metric | Definition | Formula | API Field |
|---|---|---|---|
| Adjusted Equity | Risk-adjusted account value | ∑(Currency equity × Discount rate × USD price) | adjEq |
| Position Value | Total exposure | Sum of all positions' USD value | notionalUsd |
| Maintenance Margin | Required collateral | Sum of positions' maintenance requirements | mmr |
| Account Leverage | Risk amplification | Position Value / Adjusted Equity | N/A |
Discount Rate Application
Example with BTC holdings:
- 100 BTC at $60,000
- Tiered discount rates (0.98 for first 20 BTC, decreasing thereafter)
- Adjusted value: $5,785,500 (vs. $6M face value)
Trading Rules and Risk Management
Auto-Borrow vs. Non-Borrow Modes
Auto-Borrow:
- Allows trading with insufficient currency balances
- Triggers potential borrowing when equity < frozen requirements
- Interest accrues only above interest-free limits
Non-Borrow:
- Strict balance requirements
- Orders rejected if available balance < order requirements
Risk Control Mechanisms
Order Cancellation Assessment
Prevents excessive risk by canceling orders when:
- Adjusted margin < maintenance requirements
- Available equity thresholds breached
Pre-Liquidation Process
- Triggered when maintenance margin ratio ≤ 100%
Phased liquidation approach:
- Offset opposing positions
- Delta-neutral reduction
- Unhedged position reduction
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Frequently Asked Questions
How is margin calculated in multi-currency mode?
The system converts all currencies to USD-equivalent values using current prices and discount rates. This adjusted equity determines your available margin.
What happens during liquidation?
Positions are systematically reduced through three phases to minimize account risk. The process prioritizes hedging opportunities before liquidating unhedged positions.
Can I avoid auto-borrow interest charges?
Yes, by maintaining liabilities within your interest-free limit. Exceeding this threshold triggers interest charges and potential forced repayments.
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Key Takeaways
- Multi-currency mode provides flexibility but requires careful risk monitoring
- USD-equivalent calculations determine margin requirements
- Liquidation follows structured protocols to mitigate losses
- Understanding discount rates and tiered thresholds is critical for effective trading
Risk Warning: Margin trading amplifies both gains and losses. Always monitor your maintenance margin ratio and consider risk management strategies.