Cross Margin - Trading Glossary

Cross margin on AsterDEX Perpetual Pro uses your entire account balance as collateral, allowing positions to support each other and reducing liquidation risk compared to isolated margin.

How Cross Margin Works

Shared Collateral Pool

• All funds in your Perpetual Pro account back every position
• Profitable positions offset losing positions
• Account liquidates only when total equity falls below maintenance margin

Margin Calculation

Available Margin = Account Balance + Unrealized PnL - Initial Margin Required

Cross Margin vs Isolated Margin

When to Use Cross Margin

Ideal Scenarios

• Portfolio approach: Multiple correlated positions
• Capital efficiency: Want to maximize buying power
• Hedged strategies: Long/short positions offsetting
• Experienced traders: Comfortable with account-level risk

Risk Considerations

• One bad position can liquidate entire account
• Harder to isolate risk per trade
• Requires strong risk management discipline
• Not suitable for testing new strategies

AsterDEX Cross Margin Settings

Account Configuration

1. Enable Cross Margin in Position Settings
2. Set Account-Level Risk Limits (recommended: 80% of balance)
3. Monitor Portfolio Margin in real-time
4. Use Position Sizing Rules even more strictly

Margin Requirements

• Initial Margin: 5-20% depending on asset
• Maintenance Margin: 3-15% depending on asset
• Liquidation Threshold: When account equity < maintenance margin

Advanced Cross Margin Strategies

Portfolio Margin Trading

Example Portfolio:
- Long BTC/USDT: +$10,000 exposure
- Short ETH/USDT: -$8,000 exposure  
- Net exposure: $2,000 (reduced margin requirement)

Delta-Neutral Strategies

• Spot holdings offset by short perpetuals
• Funding rate arbitrage with minimal directional risk
• Options-like strategies using perpeutal combinations

Risk Management in Cross Margin

Account-Level Stops

Set portfolio heat limits:

• Conservative: Stop trading at -10% account drawdown
• Moderate: Stop trading at -15% account drawdown
• Aggressive: Stop trading at -20% account drawdown

Position Correlation Monitoring

Track correlation between positions:

• Avoid overconcentration in correlated assets
• Monitor sector exposure (e.g., too much DeFi risk)
• Rebalance when correlations spike during market stress

Cross Margin Calculations

Available Leverage

Max Position Size = (Account Equity × Max Leverage) / Asset Price
Max Leverage = 1 / Initial Margin Requirement

Liquidation Price (Multi-Position)

More complex than isolated margin:

Liquidation occurs when:
Account Equity ≤ Maintenance Margin for all positions

Common Cross Margin Mistakes

1. Overleverage: Using max available margin
2. Correlation Blindness: Taking multiple similar positions
3. No Account Stops: No exit plan for portfolio drawdown
4. Position Sizing Neglect: Assuming cross margin = more size allowed

Cross Margin Checklist

Before using cross margin:

1. ✅ Understand account-level liquidation risk
2. ✅ Set strict position sizing rules
3. ✅ Monitor portfolio correlation
4. ✅ Establish account drawdown limits
5. ✅ Have experience with isolated margin first
6. ✅ Test with small positions initially

Cross margin amplifies both opportunities and risks—use it only with proven risk management systems.