MCS | Leveraging Cross Margin For Futures Trading

MCS | Leveraging Cross Margin For Futures Trading

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Greetings from MCS, the derivatives trading platform where traders ALWAYS come first.

What is Cross Margin?

Cross margin capitalizes on all the asset capital in the traders’ available balance. This lowers the risk of liquidation depending on the amount of equity available to use as collateral. If the position is in a loss and the entire available balance reaches the maintenance margin, the position will be liquidated and the trader’s equity will be transferred to the liquidation engine. Therefore, traders must understand this risk and plan their trading strategies carefully when trading with cross margin.

Cross Margin on MCS

The cross margin feature on MCS provides extensive control over the traders’ assets with the function to set different leverages for each contract (many exchanges set default leverage as the max leverage of the contract). Therefore, when holding positions in multiple contracts, even if liquidation occurs in one contract causing the traders’ equity to be transferred to the liquidation engine, it will not affect the other collaterals used to enter the other contracts. Furthermore, traders are able to choose the margin modes for each contract rather than selecting the margin mode as a whole.

Using Cross Margin as a Trading Strategy

In general, cross margining strategies are best used when traders hope to speculate, hedge, and scalp trade without liquidation concerns. However, traders must keep in mind that using cross margin does not always decrease the risk of liquidations. If a trader decides to enter a position with the greatest number of contracts on maximum leverage, this would be exactly the same as an isolated margin. Therefore, to best utilize cross margin, traders should use a small percentage of their equity when entering a trade.

While using cross margin, a smart way to minimize loss and exit with successful profit is using the Stop Loss and Take Profit functions together with cross margin. No trader wants to lose all of their capital in their wallet. In order to minimize this, traders can set orders to automatically close their position once the price hits a certain level.

More information on Stop Loss and Take Profit can be found here.

https://blog.mycoinstory.com/exitstrategy-en/#:~:text=Trailing Stop Order-,Stop Loss Order, positions with a market order.

How do I use Cross Margin on MCS?

The default margin mode on MCS is Isolated Margin. To convert your margin mode, just click the button “Isolated” and change to “Cross” when the pop-up appears.

Traders ALWAYS come first on MCS.

Thank you.

MCS Team

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