👉 #Margin
1. Cross Margin
- Definition: In cross margin mode, the entire balance of the trader's margin account is used to maintain the position. This means that all available funds in the account can be utilized to prevent liquidation of the position.
- Advantages:
- Increased Flexibility: Since all funds are pooled together, traders can avoid liquidation more easily during market fluctuations, as the system can draw from the entire account balance.
- Potential for Higher Leverage: Traders may be able to take larger positions relative to their account balance, as the margin is not limited to a specific amount.
- Disadvantages:
- Higher Risk: If the market moves against the trader, they risk losing a larger portion of their total account balance, as all funds are at stake.
- Less Control: Traders have less control over individual positions since the entire account balance is used as collateral.
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