To better serve users and improve their trading experience, Poloniex has launched Cross Margin Mode for USDT-margined perpetual contracts. In this mode, all funds in the futures account can be used as margin to increase fund utilization and maximize profits for users.
What is cross margin?
Cross margin is using all of a user’s funds in the futures wallet as an available balance. That is to say, the margin is shared among all the user’s positions. By using cross margin, the user will have more funds in their account balance to avoid liquidation when leverage is being selected. The cross margin mode has a better capability to resist potential losses. It is important to note, while cross margin can maximize gains, it does increase risks as users may lose all available funds if a position is liquidated.
What is the difference between cross margin and isolated margin?
- Cross Margin Mode
- In Cross Margin Mode, all assets in traders' futures accounts will be used as margin to maintain their positions, but they may lose all these assets upon forced liquidation due to price fluctuations;
- Example: User A opens a position in BTC perpetual contracts. When forced liquidation occurs, the user will lose all USDT balance in the futures account.
- Isolated Margin Mode
- In Isolated Margin Mode, traders' futures account balance is independent of margin. Traders can select leverage levels at their will. The maximum loss to a trader is the initial margin and any funds later added as margin once forced liquidation happens due to price fluctuations;
- Example: User A opens a position in BTC perpetual contracts with 10x leverage at the price of $10,000. 1,000 USDT is deposited as the initial margin. When forced liquidation occurs, the user will only lose the initial margin of 1,000 USDT (trading fee not included).
Futures Cross Margin Mode FAQ
Why can’t I open-cross margin if I have an isolated margin position?
We do not support open isolated margin position and cross position at the same time.
What is Margin Ratio?
- USDT Cross(%) = Maintenance Margin/Margin Balance.
When cross ratio reaches 100%, positions will be liquidated.
- Maintenance margin: The minimum margin amount to maintain all cross positions
- Margin Balance: Balance + unrealized PNL + historic funding fee
Can we use auto-deposit function in cross margin mode?
No. Since in cross margin mode, all assets in traders' futures accounts have been used as margin to maintain.
Initial Leverage and Current Leverage
Cross Margin Mode: In an open position, leverage will not change unless increase/decrease of position.
Isolated Margin Mode: After opening a position, the actual leverage will change along with the unrealized PNL. That means, if the unrealized PNL is positive, leverage will decrease and vice versa. Actual leverage = position value / (margin+unrealized P&L).
Why my cross margin position got liquidated?
- USDT Cross = 100%
- Margin Balance <= maintenance margin
- Mark price reaches position liquidation price
What are the risks of trading Futures?
Utilizing leverage in crypto trading is complex and risky. Traders may encounter substantial losses if the leverage is too high and there are not enough balance to maintain the position. During market conditions where there is low volatility and small price movements, the positions may get liquidated if traders do not exercise proper risk management. Please read our Help Center article to learn more about the risks of Futures trading.