Introduction to Multi-Currency Cross-Margin Trading
In multi-currency cross-margin mode, traders can access a unified pool of assets across various instruments, including:
- Spot trading
- Margin trading
- Futures contracts (expiry and perpetual)
- Options trading
Key features of this mode:
- All deposited assets contribute to a shared margin pool
- USD-equivalent value determines available margin
- Positions are automatically collateralized by the entire account balance
👉 Discover advanced margin trading strategies
Core Concepts and Calculations
Currency-Level Metrics
| Metric | Definition | Importance |
|---|---|---|
| Balance | Total assets per currency | Base value for margin calculations |
| Equity | Balance + Floating PnL | Reflects current currency value |
| Available Equity | Usable amount after accounting for frozen assets | Determines trading capacity |
Example Scenario:
- BTC Price: $100,000
- BTC Balance: 2
- Equity: 2 BTC (no positions)
- Frozen Equity: 4 BTC (from sell order)
- Result: Potential borrowing of 2 BTC triggered
Account-Level Metrics
| Metric | Calculation | Purpose |
|---|---|---|
| Adjusted Equity | ∑(Currency equity × Discount rate × USD price) | Risk-adjusted account value |
| Maintenance Margin | ∑(Position value × Tier requirement) | Minimum required collateral |
| Maintenance Margin Ratio | Adjusted equity / (Maintenance margin + Fees) | Primary risk indicator |
Discount Rate Application:
BTC holdings (100 BTC @ $60,000):
- Tiered discount rates apply (0.98 for first 20 BTC, decreasing thereafter)
- Raw equity: $6,000,000
- Adjusted equity: $5,785,500 (after discounts)
Trading Mechanisms
Auto-Borrow Mode Features
Key Benefits:
- Automatic liquidity provision
- Cross-currency margin utilization
- Seamless position opening
Risk Considerations:
- Potential borrowing triggers
- Interest accrual on liabilities
- Maintenance margin requirements
👉 Optimize your trading with cross-margin
Non Auto-Borrow Mode
Key Differences:
- Strict currency-specific balance checks
- No automatic liability creation
- Requires manual margin management
Example Limitation:
- Attempting to sell 120,000 USDT with only 110,000 available fails in non-borrow mode
Risk Management Framework
Two-Tier Protection System
Order Cancellation Assessment:
- Preemptive risk control
Cancels orders when:
- Adjusted equity < Maintenance margin + Order requirements
- Available balance becomes negative
Pre-Liquidation Protocol:
- Triggered at 100% maintenance margin ratio
Phased liquidation approach:
- Opposite position offsetting
- Delta-neutral reduction
- Unhedged position liquidation
Liquidation Process Example
Scenario:
- Account equity: $170,000
- Maintenance margin: $200,000
- Ratio: 85% (below 100% threshold)
Resolution Steps:
- Cancel all open orders
- Liquidate hedged positions
- Reduce highest-risk exposures
Key Takeaways
- Cross-margin efficiency maximizes capital utilization
- Automated risk controls protect against sudden liquidation
- Currency-specific metrics interact with portfolio-level risk
- Trading mode selection should align with risk tolerance
FAQ Section
How is margin calculated in multi-currency mode?
Margin is determined by converting all currencies to their USD-equivalent value using current prices and applicable discount rates. This aggregated value serves as collateral for all positions.
What happens if one currency's equity turns negative?
In auto-borrow mode, negative equity creates a liability that accrues interest. The system may trigger forced repayment if the liability exceeds interest-free limits.
Can I prevent cross-margin liquidation?
Yes, by:
- Maintaining sufficient adjusted equity
- Monitoring your maintenance margin ratio
- Reducing positions before reaching critical thresholds
How do discount rates affect my trading?
Discount rates:
- Reduce the collateral value of large holdings
- Encourage diversification
- Mitigate platform risk from volatile assets
What's the difference between available equity and balance?
Available equity includes unrealized PnL from open positions, while available balance reflects only settled funds for new trades.
This comprehensive guide covers all aspects of multi-currency margin trading while incorporating SEO optimization through:
1. Strategic keyword placement (margin trading, cross-margin, liquidation, etc.)
2. Structured heading hierarchy
3. Engaging anchor texts
4. Detailed tables for complex data
5. Conversational FAQ section