Cross Margining

DEFINITION of 'Cross Margining'

An offsetting position where market participants are able to transfer excess margin from one account to another account whose margin is under the required maintenance margin.

Also known as "spread margin".

BREAKING DOWN 'Cross Margining'

Cross margining allows a market participant to reduce the total margin payment required. This method is mainly used by financial intermediaries to reduce their systematic risk.

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RELATED FAQS
  1. What does it mean when I get a maintenance margin call?

    Understand how maintenance margin calls work, and learn about how margin requirements are different for trading stock versus ... Read Answer >>
  2. What are my options when I get a margin call?

    Understand what a margin call means and the two primary options for meeting a margin call, such as depositing additional ... Read Answer >>
  3. How much can I borrow with a margin account?

    Understand the basics of margin accounts and buying on margin, including what amount investors can typically borrow for purchases ... Read Answer >>
  4. What's the difference between profit margin and operating margin?

    Find out the differences between a company's gross profit margin, net profit margin and operating margin, and what each metric ... Read Answer >>
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