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Cross-margin

One collateral pool margins positions across every ticker. Offsetting legs are netted, with no liquidation price.

A single collateral pool backs positions across every ticker. You don't keep a separate pot of collateral per stock.

Isolated: every leg funded separately

Leg ALeg BLeg CLeg D

Cross-margin: offsetting legs netted

Max loss, reservedFreed
A hedged book needs less collateral than the sum of its parts, and every leg's maximum loss stays reserved.

Payoff shape at expiry · not to scale

How netting works#

  • Offsetting defined-risk legs are netted, so a hedged book needs less collateral than the sum of its parts.
  • Every position's maximum loss stays reserved. Netting only removes collateral that could never be needed.
  • Because of that, cross-margin never introduces a liquidation price.

What it's for#

  • Running a book of spreads and hedges across tickers from one account.
  • Freeing collateral that isolated margin would lock up twice.