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.

  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin ...
  2. Margin Call

    A broker's demand on an investor using margin to deposit additional ...
  3. Financial Intermediary

    An entity that acts as the middleman between two parties in a ...
  4. Leverage

    1. The use of various financial instruments or borrowed capital, ...
  5. Margin

    1. Borrowed money that is used to purchase securities. This practice ...
  6. Equity

    Equity is the value of an asset less the value of all liabilities ...
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