Understanding cross-margin, leverage, and risk
Cross-margin uses one shared pool of collateral for all your margin trades. This means profits from one position can help offset losses in another, but if your overall Margin Level drops too low, positions may be liquidated to repay what you owe.
Key terms
- Collateral: The assets you transfer to your Margin wallet to back your trades.
- Debt: The amount automatically borrowed to fill your orders, plus any interest that builds up over time.
- Net Equity: The total value of your assets across wallets including your unrealized profit or loss, minus all debt (including interest).
- Margin Level (ML): Your Net Equity divided by your total debt (including interest). This number determines your risk level. Liquidation happens when it drops to the Maintenance Margin Ratio (around 1.10×).
Here's an example:
Say you had 3,000 USDT in your spot wallet, then transfer 2,000 USDT as collateral to the margin wallet, borrow 8,000 USDT, and buy 0.2 BTC at 50,000 USDT.
If you have a 200 USDT profit, your combined balance shows 3,200 USDT: 1,000 USDT in Spot + 2,200 USDT Margin net equity.
Inside your margin wallet it will show -8,000 USDT (what you still owe) and +0.2 BTC.
Another example: multi-position cross-margin (pooled collateral)
Suppose you have 5,000 USDT in your Margin Wallet and you open two positions at the same time under cross-margin:
• Long ETH worth 4,000 USDT (auto-borrow 2,000 USDT)
• Long SOL worth 3,000 USDT (auto-borrow 1,500 USDT)
Because both positions sit under cross-margin, your 5,000 USDT collateral is pooled and supports both positions together. There is a single account-wide Margin Level, not one per position.
If the market moves against you and the account-wide Margin Level falls to ≤1.10× (the Maintenance Margin Ratio), Bitso liquidates positions across the whole Margin Wallet (not just one asset) to restore a healthy state. The order of repayment is accrued interest first, then borrowed principal. Any surplus after debt, interest, and fees is returned to your Margin Wallet.
Note: alternative pairings such as BTC/ETH behave identically, what matters is the account-wide Margin Level, not which assets you hold.