Why cross-margin plus an order book changes everything for derivatives traders
Whoa, this caught me off guard. Sometimes you read about an exchange and you think you get it. Then you actually trade there and your whole mental model shifts. My instinct said “simple ledger stuff” at first, but then things got way more interesting.
Let me be blunt: cross-margin isn’t just a convenience. It changes how you size positions, how you think about liquidation risk, and how you allocate collateral across correlated bets. Initially I thought cross-margin would mainly be useful for big funds only, but that wasn’t the full story. On one hand, shared collateral reduces the cash drag between positions, though actually it also concentrates counterparty exposure in ways traders must respect.