Cross margin, also known as spread margin, is a type of margin trading in which the entire amount of a user’s available account balance is used to avoid liquidations. Any realized profit and loss (PNL) helps add margin to a losing position when using cross-margin trading. Cross-margin trading can help users hedge existing positions as well as arbitrageurs limit their exposure to the losing side of a trade in the event of a liquidation. Cross-margin trading is the inverse of isolated margin trading, in which only a portion of the account balance is used for each trade.
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