Binance, Exchanges

What Is Cross Margin Binance?

Cryptocurrency exchanges like Binance use what’s called a “cross margin” to allow traders to use leverage when trading digital assets. In a traditional “spot” market, like the stock market, traders can only trade with the funds they have deposited into their account.

This limits how much profit or loss they can make on a single trade.

With a cross margin, however, traders can use the full value of their account to place trades. So, if you have $10,000 in your account and you want to place a $5,000 trade, you can do so without having to deposit any additional funds.

The downside of this is that it also amplifies your losses. If the trade goes against you, you will be responsible for the full $5,000 loss.

This is why cross margins are only suitable for experienced traders who know how to manage their risk. For most people, it’s better to stick with a spot market where your losses are limited to the amount of money you have deposited into your account.

Previous ArticleNext Article