How Does Collateralization (E.g. Cross-Margin Vs. Isolated Margin) Impact a Trader’s Maximum RFQ Size Capacity?
Collateralization significantly dictates a trader's maximum RFQ size. Cross-margin uses a trader's entire account balance as collateral for all open positions, allowing for a larger aggregate RFQ size by spreading the risk.
Isolated margin dedicates a specific, limited amount of collateral to a single position, restricting the maximum size of that specific RFQ trade. Cross-margin allows for greater leverage and larger positions, but also increases the risk of full account liquidation.
