Portfolio margin trading, often referred to as cross-currency margin mode, allows traders to use a single account margin for multiple trading products. In this setup, assets deposited into a unified portfolio margin account can serve as collateral for trading spot, leverage, futures, perpetual swaps, and options. All assets, regardless of their currency, are converted into a total USD value to determine available margin for orders and open positions.
One key advantage is the flexibility in borrowing. If a user lacks sufficient balance in a specific currency but has adequate total USD equity, they can still sell that currency spot or trade derivatives settled in it. Should the equity of that currency turn negative due to overselling or losses, an automatic liability is created, and interest is charged on the borrowed amount.
How Cross-Currency Portfolio Margin Works
In cross-currency margin mode, risk is evaluated based on the total USD value. Your positions remain safe as long as the overall USD value of your assets covers the maintenance margin required for all open positions. If it falls short, partial liquidation or forced liquidation may occur. Alternatively, users can opt for an isolated margin mode to separate risks between different positions.
Portfolio Margin with Borrowing Enabled
When the borrowing feature is activated, and your total USD equity is sufficient, you can sell a currency or trade derivatives settled in that currency even if your balance in that specific currency is low. This action creates a potential borrow, which occupies a portion of your initial margin.
If selling or trading losses lead to negative equity in a currency, a real liability is generated. Interest is charged on this borrowed amount, and the liability affects both initial and maintenance margin requirements based on the currency’s borrowing tier.
Portfolio Margin Without Borrowing
If you disable automatic borrowing, you can only use the available balance of a specific currency for spot, futures, perpetual swaps, or options trades in that currency. However, since risk is shared across all currencies in the account, losses in one currency might lead to negative equity even if the overall USD value is sufficient. In such cases, a passive liability is created.
Within the interest-free allowance, no interest is charged. If the liability exceeds this allowance, the system triggers an automatic repayment process (TWAP). Other positive assets are sold for USDT, which is then used to buy back the owed currency, bringing the liability within the interest-free limit.
Order Validation in Cross-Currency Portfolio Margin Mode
With Auto-Borrowing Enabled
When placing orders for spot, futures, perpetual swaps, or options, the system checks if the total effective margin covers the occupancy margin including the new order.
Example:
Sell 20 DASH at 1 BTC/DASH (simplified for calculation).
- Effective Margin = Σ(Positive Equity × Spot Price × Discount Rate) + Σ(Negative Equity × Spot Price) – Loss from Spot Sales/Option Buys – Estimated Fees for All Orders
- Occupancy Margin Including Order = Initial Margin for the Order + Potential Borrow Initial Margin
If effective margin ≥ occupancy margin, the order proceeds.
Potential borrows occur when available equity in a currency is less than the amount used. They occupy additional initial margin and incur potential interest.
Borrowing Limits and Interest-Free Allowance
- Potential borrows include real borrows and virtual borrows.
- Real borrows (from leverage, option buying, or unrealized loss in contracts) occupy user leverage tier limits and platform limits.
- Virtual borrows (from contract openings) only occupy user leverage tier limits.
- Unrealized losses from contracts enjoy an interest-free allowance, while realized losses and other borrows do not.
Without Auto-Borrowing
When borrowing is disabled, orders require both sufficient total USD margin and adequate available balance in the specific currency.
Available balance refers to the amount usable for isolated margin, spot trades, and option purchases—excluding profits from portfolio margin.
Even in this mode, losses in one currency might create passive liabilities if overall USD equity remains sufficient.
Position Management in Cross-Currency Portfolio Margin
Perpetual and Futures Contracts
Both "open/close" and "buy/sell" position modes are supported. The system employs two-layer risk checks: risk control order cancellation and pre-liquidation validation.
Risk Control Order Cancellation
If effective margin < maintenance margin for positions + initial margin for open orders + order fees, all futures, perpetual, and options opening orders are canceled. If the condition persists, spot orders causing trading loss are canceled.
In non-borrowing mode, if (currency equity - occupied balance) < maintenance margin + initial margin + fees, all orders increasing occupancy are canceled.
If transferable balance < 0, all isolated margin orders, option buy orders, and sell orders for that currency are canceled.
In borrowing mode, if real borrows > maximum allowable, all orders increasing real borrows are canceled.
Pre-Liquidation Check
Liquidation is triggered when the margin ratio reaches 100%. A warning is issued at 300%.
If the margin ratio ≤ 100%, orders are canceled first. If the account remains unsafe, forced liquidation occurs in three stages:
- Reduce opposite positions in the same contract under "open/close" mode.
- If needed, reduce positions that hedge delta exposure within the same index while minimizing overall risk.
- If risk remains, non-hedging positions are reduced based on their effectiveness in lowering risk, prioritizing those with the highest impact.
If liquidation leads to negative equity, the platform's risk reserve covers the loss, and a compensation bill is generated.
Frequently Asked Questions
What is cross-currency margin mode?
It's a margin system where all account assets are converted to USD value to collateralize multiple trading products—spot, leverage, futures, perpetual swaps, and options—within a single account.
How does borrowing work in this mode?
If enabled, you can sell or trade a currency even with insufficient balance, provided total USD equity is adequate. This creates a borrow liability, which incurs interest if the currency's equity turns negative.
What happens if I disable auto-borrowing?
You can only use the available balance of a specific currency for trades in that currency. However, shared risk might still lead to passive borrowing if losses occur in one currency but overall USD equity remains sufficient.
How is risk managed in portfolio margin?
Risk is based on total USD value. Positions are maintained if assets cover maintenance margin. If not, orders are canceled, or partial liquidation occurs. 👉 Explore advanced risk management strategies
What triggers liquidation?
Liquidation starts when the margin ratio hits 100%. The system cancels orders first, then reduces positions in stages: opposite positions, delta-hedged positions, and finally non-hedged positions based on risk reduction efficiency.
Is interest charged on all borrows?
Unrealized losses from contracts enjoy an interest-free allowance. Other borrows, like leverage loans or option buys, incur interest immediately. Automatic repayments occur if liabilities exceed the allowance.