What are the differences between cross margin and isolated margin?
While cross margin enables users to share the margin account balance across positions to mitigate liquidation, isolated margin mode doesn’t allow margins to be shared. Instead, a position’s margin is isolated from other account positions, and is backed by a separate margin account balance.
What are the pros of cross-margin?
The advantages of cross-margin trading is to increase a firm’s or individual’s liquidity and financing flexibility.It’s a strong risk management tool in volatile markets. Poloniex allows Spot Account users to use cross-margin mode to automatically sell collateral assets in order to repay borrowed funds in case the risk level is too high to trigger liquidation.
How do I earn with cross-margin trading?
While there is no assurance in investment, crypto investors usually take the “long-short investment strategy” to try to make gains through margin trading. Having a “long” position means that you own the assets with the expectation that the assets will rise in value in the future. While a “short” position refers to the sale of a token that you borrowed with thebelief that the price of the token will decrease in value. If you believe that the price of a token will rise or fall, you can now use up to 3x leverage on Poloniex spot trading to either sell or buy with the auto-borrow and repay functionality to enhance your capital and financial flexibility.
What is the cross margin mode on Poloniex spot trading?
On December 9, 2022, Poloniex launched a cross margin mode for spot trading to further enhance users’ trading experience in an ever changing market. Below you can find its features and functionalities:
Improved capital utilization: users can borrow funds and use assets across positions to offset losses and minimize chances of liquidation.
Unified spot accounts: users can engage in margin trading on a single unified spot account without transferring assets between them.
“Auto-borrow & repay” feature: the system automatically calculates the amount users need to borrow and repay when placing orders using cross margin. As for the “auto-borrow” function, users can initiate a loan when trading and transferring tokens. The user’s maximum borrowable amount will be determined according to the overall margin level of the user’s spot account, which will be shown in the inbuilt calculator, in addition to the functionality to transfer funds from different accounts (e.g. from Spot Account to Future Account). As for the “repay” function, every time a user trades, transfers or deposits a token, the asset will be used to automatically repay the loan while avoiding additional interest burdens on the user.
Ultra-low interest rates: Poloniex offers the most competitive interest rates in the market.
Support withdrawal: the system will automatically stake assets in the user’s account and borrow the token the user wants to withdraw or trade if the margin ratio of a user’s account is over 200% to enhance financial flexibility and convenience.
was originally published in The Poloniex blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
