Cross Margin, also known as “Spread Margin” is a margin method that utilizes the full amount of funds in the Available Balance to avoid liquidations. Any Realized PnL from other positions can aid in adding margin on a losing position.
This margin method is useful for users who are hedging existing positions and also for arbitrageurs that do not wish to be exposed on one side of the trade in the event of a liquidation.
Note that, by default all positions are initially set to “Cross Margin”.
Margin Mode: Margin Ratio = Position Value / (Fixed Margin + min[0,UPL])
Example of Margin Ratio
For instance, 1 BTC worth USD 10,000, a user who selected Fixed Margin Mode opens a long position of 10000USD, which is approx. 1 BTC. Wants to have 10X leverage. The Number of contracts opened will be 10000, and the Maintenance Margin Ratio will be 0.5%，Forced-Liquidation Commission Fee Rate will be 0.075%.
Margin Locked = Notional Value x Number of contracts / (Average Position Price X Leverage) = 1 USD x 10000 / (10,000 USD/BTC) / 10 = 0.1 BTC
Using liquidation formula, liquidation price = 9139
When the price of 1 BTC falls to $9139:
The UPL = Face Value x Number of contracts / Average Position Price - Face Value x Number of contracts / Latest Mark Price = 1 USD x 10000 / 10,000 USD/BTC - 1 USD x 10000 / 9,139 USD/BTC = -0.0942 BTC
Maintenance Margin = 0.005 * 1 USD x 10000 / (10,000 USD/BTC) = 0.005 BTC
Commission @ 9139 = 0.00075 * 1 USD x 10000 / (9139 USD/BTC) = 0.00082 BTC
Remaining margin <0:
= Locked margin + realized loss - maintenance margin - commission paid
= 0.1 - 0.0942 - 0.005 - 0.00082 = -0.00002 BTC