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Cross Margin

What is Cross Margin?

The trader can distribute margin balances among several open positions by using a cross margin. Therefore, using extra margin from one place to make up for missing margin from another is a viable option. A cross-key margin's advantage is that, in some circumstances, it may be able to avert margin calls and the forced liquidation of a losing position.

Traders can get additional exposure without adding more capital by dividing the margin among accounts. Cross-margin amounts are decided by parties and brokers, and the margin is automatically transferred between accounts that have signed up for the service. Cross-margining may be preferred by traders since it may take longer to close out a single lost position when the market conditions change. To cover a little deficiency in the required minimum maintenance, the excess margin is moved from another account. Cross-margin aids in preventing hurried margin calls and compelled liquidations.