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What is the cross margin feature on Binance and how does it work?

avatarLurian OrsinaDec 16, 2021 · 3 years ago3 answers

Can you explain what the cross margin feature is on Binance and provide an overview of how it works?

What is the cross margin feature on Binance and how does it work?

3 answers

  • avatarDec 16, 2021 · 3 years ago
    The cross margin feature on Binance is a risk management tool that allows traders to use their entire account balance as collateral for their positions. Unlike isolated margin, which requires traders to allocate specific amounts of collateral to individual positions, cross margin aggregates the total account balance to support all open positions. This means that if the margin level of a specific position falls below the required threshold, the system will automatically allocate additional funds from the account balance to prevent liquidation. Cross margin provides traders with more flexibility and reduces the risk of liquidation compared to isolated margin.
  • avatarDec 16, 2021 · 3 years ago
    Cross margin on Binance is like having a safety net for your trades. Instead of having to allocate collateral for each individual position, you can use your entire account balance to support all your open positions. This means that if one of your positions starts losing value and the margin level falls below the required threshold, Binance will automatically allocate additional funds from your account balance to prevent liquidation. It's a great feature for traders who want to maximize their trading potential while minimizing the risk of liquidation.
  • avatarDec 16, 2021 · 3 years ago
    BYDFi, a leading cryptocurrency exchange, offers the cross margin feature to its users. With cross margin, traders can use their entire account balance as collateral for their positions, providing them with more flexibility and reducing the risk of liquidation. Instead of having to allocate specific amounts of collateral to individual positions, cross margin aggregates the total account balance to support all open positions. This means that if the margin level of a specific position falls below the required threshold, BYDFi will automatically allocate additional funds from the account balance to prevent liquidation. Cross margin is a powerful tool for traders looking to manage their risk effectively and optimize their trading strategies.