What Is Cross-Margining and How Does It Affect Initial Margin Requirements?
Cross-margining is a system that allows a trader to use the excess margin from one account or product to offset the margin requirement for a position in another related account or product. This is possible when the positions are deemed to have offsetting risks.
By netting the risks of correlated positions, cross-margining can significantly reduce the overall initial margin requirement for a diversified portfolio.
