Cross margin trading in a multi-currency environment offers advanced traders a powerful way to manage capital efficiency across diverse digital assets. By leveraging a unified margin pool denominated in USD, users can open positions across spot, futures, and options markets using the combined value of their holdings. This model enhances flexibility but requires careful risk management due to its interconnected nature.
Understanding Multi-Currency Cross Margin
In multi-currency cross margin mode, all deposited assets—such as BTC, ETH, USDT, and others—are evaluated in USD terms to determine available margin. This allows traders to use the total equity across multiple cryptocurrencies as collateral for any trade, regardless of the base or quote currency.
👉 Discover how cross margin maximizes your trading power with smart risk allocation.
When you deposit assets into your trading account, the system calculates your adjusted equity—a discounted USD value of all holdings—used to support open positions and new orders. If your overall adjusted equity meets or exceeds the required maintenance margin, your positions remain secure. However, if this ratio falls below critical thresholds, partial or full liquidation may occur.
A key feature of this system is auto-borrow mode, which enables trading even when the available balance of a specific currency is insufficient—provided the total USD-equivalent equity supports it. For example, selling USDT beyond your current balance becomes possible if your BTC and SOL holdings provide enough backing value. In such cases, the platform automatically generates a liability in that currency, subject to interest after exceeding the interest-free threshold.
Core Concepts & Key Metrics
Currency-Level Formulas
Each cryptocurrency in your portfolio contributes differently to your overall margin capacity. The following metrics define how individual currencies are assessed:
- Balance: Total amount held of a given currency.
- Floating PnL (Cross): Unrealized profit or loss from cross-margin positions settled in that currency.
- Equity (Cross): Balance + Floating PnL + Options Value – Accrued Interest.
- Frozen Equity: Amount currently reserved for open orders, including spot sells, options buys, isolated margin trades, and estimated fees.
- Available Equity: Usable portion for new trades = Max(0, Equity – Frozen Equity).
- Liability: Negative equity resulting from oversold positions or losses; interest accrues based on this.
- Potential Borrowing: Triggered when equity is insufficient to cover frozen amounts.
- Potential Borrowing Frozen Margin: Margin required for potential borrowing = Potential Borrow / Borrow Leverage.
These values dynamically update with market movements and order activity, directly influencing your ability to enter new trades.
Account-Level Calculations
At the account level, risk is measured in USD using several aggregated metrics:
- Adjusted Equity: Discounted sum of all currency equities, reduced by frozen components like isolated margin orders and estimated fees.
- Position Value: Total USD value of all open cross-margin positions plus potential borrowing.
- Frozen Margin: Margin currently locked in open orders and positions.
- Available Margin: Adjusted Equity – Frozen Margin; indicates usable margin for new trades.
- Maintenance Margin: Minimum margin needed to keep all positions open.
- Maintenance Margin Ratio: Adjusted Equity / (Maintenance Margin + Liquidation Fees). A ratio ≤ 100% triggers forced liquidation.
This structure ensures that risk is evaluated holistically, allowing diversified portfolios to support larger positions while maintaining systemic stability.
Practical Example: BTC, SOL, and USDT Portfolio
Suppose you hold:
- 2 BTC at $100,000 each
- 6,000 SOL at $200 each
- 100,000 USDT at $1 each
You open a 10x long position on BTC-USDT perpetual futures (0.5 BTC at $80,000), which later rises to $100,000. Your floating PnL increases by $10,000.
Now, attempting to sell 4 BTC when your BTC equity is only 2 BTC triggers potential borrowing of 2 BTC. With a borrow leverage set at 5x, the potential borrowing frozen margin becomes 0.4 BTC.
Despite insufficient native BTC equity, the trade proceeds under auto-borrow mode because your total adjusted equity remains sufficient in USD terms.
👉 See how smart borrowing rules let you trade beyond your immediate balance.
Auto-Borrow vs. Non Auto-Borrow Mode
Auto-Borrow Mode
Enabling auto-borrow allows you to:
- Sell assets you don’t fully hold (e.g., shorting USDT beyond balance)
- Open derivative positions even with low currency-specific equity
- Automatically incur liabilities when necessary
However, once liabilities exceed the interest-free limit, interest begins accruing. Unhedged losses from expiry or perpetual futures also count toward this limit.
Non Auto-Borrow Mode
With auto-borrow disabled:
- Orders require sufficient available balance (for spot) or available equity (for derivatives)
- No automatic borrowing occurs
- Greater control over liabilities but less flexibility
For instance, trying to sell 120,000 USDT with only 110,000 available fails unless auto-borrow is enabled—even if total portfolio equity is strong.
Risk Assessment Framework
The platform employs a two-tiered risk control mechanism to protect both users and the system.
Order Cancellation Assessment
Before reaching liquidation levels, the system may cancel certain orders if:
- Adjusted equity < Maintenance margin + Initial margin for new orders
- Available equity drops below required thresholds
- Borrowing limits are exceeded (in auto-borrow mode)
This prevents sudden liquidations and gives traders time to adjust.
Pre-Liquidation Assessment
Liquidation risk is monitored via the maintenance margin ratio:
- ≥300%: Normal operation
- ≤300%: Warning issued
- ≤100%: Pre-liquidation order cancellation begins
After unfilled orders are canceled:
If ratio still ≤100%, forced partial liquidation starts in three phases:
- Opposite-direction positions (hedge mode)
- Delta-neutral hedged pairs
- Remaining unhedged positions prioritized by risk reduction potential
Long options are exempt from liquidation.
Frequently Asked Questions
Q: What happens when I exceed my interest-free borrowing limit?
A: Once your liability in a currency surpasses the interest-free threshold, interest begins accruing on the excess amount. Monitoring your liabilities closely helps avoid unexpected charges.
Q: Can I disable auto-borrow for specific currencies only?
A: No—auto-borrow is an account-wide setting. You must turn it off entirely to prevent automatic borrowing across all currencies.
Q: How are discount rates applied to my holdings?
A: Each currency has tiered discount rates based on holding size. For example, BTC may have a 98% rate up to 20 BTC, decreasing incrementally beyond that. These rates reduce volatility exposure in margin calculations.
Q: Why did my order get canceled even with high portfolio value?
A: Even with strong overall equity, insufficient available balance or equity in the specific currency used for settlement can block orders—especially in non-auto-borrow mode.
Q: Are long options ever liquidated?
A: No. Long options positions are not subject to forced liquidation under any circumstances.
Q: How does the system choose which position to liquidate first?
A: It prioritizes positions whose reduction most effectively lowers maintenance margin relative to equity loss—favoring high-maintenance, low-delta impact trades first.
Final Thoughts on Risk Management
While multi-currency cross margin boosts capital efficiency, it also increases systemic risk due to interdependencies between assets. Traders should:
- Regularly monitor maintenance margin ratios
- Understand discount rate impacts
- Use isolated margin for high-risk strategies
- Avoid over-leveraging during volatile periods
👉 Stay ahead of liquidation risks with real-time margin analytics tools.
Remember: leveraged trading amplifies both gains and losses. Always assess whether such strategies align with your financial goals and risk tolerance.
This content is for informational purposes only and does not constitute financial advice.