What is cross-margin on Kraken?

Understanding Cross-Margin on Kraken

Cross-margin on Kraken is a trading feature that allows users to utilize the entire balance of their margin account as collateral for all open margin positions. Unlike isolated margin, where each trade is backed by a specific amount of funds, cross-margin pools all available assets together to prevent liquidation. This system increases flexibility for traders who manage multiple positions simultaneously. The key benefit lies in risk distribution—if one position moves against you, other assets in the account can help absorb losses, potentially avoiding margin calls or forced closures.

How Cross-Margin Differs from Isolated Margin

On Kraken, traders can choose between two margin modes: cross and isolated. In isolated margin, each trade is treated separately—you allocate a fixed amount of funds as collateral for that specific position. If the position loses value beyond the allocated margin, it gets liquidated independently. In contrast, cross-margin treats your entire account balance as a single collateral pool. This means gains from one position can offset losses from another, enhancing capital efficiency. However, it also implies that a significant loss in one trade could affect your entire account, not just a portion of it.

Setting Up Cross-Margin on Kraken: Step-by-Step Guide

To enable cross-margin trading on Kraken:

• Log into your Kraken account and navigate to the 'Funding' tab
• Select 'Margin Accounts' from the dropdown menu
• Click on 'Enable Margin Trading' if you haven’t already completed identity verification
• Once margin is enabled, go to the trading interface for any supported pair (e.g., BTC/USD)
• Locate the margin mode selector near the order form—it will show options like “Isolated” or “Cross”
• Choose “Cross” to activate cross-margin for that specific trade
• Confirm the selection by placing a margin order—you’ll see your total account equity reflected as available margin

  This process must be repeated for each new trade if you switch between modes. Kraken does not apply cross-margin globally by default—it’s per-trade.

  Risk Management with Cross-Margin

  Using cross-margin requires careful attention to risk exposure. Since all assets are pooled, a single volatile position can impact your entire margin balance. Kraken provides tools like real-time margin level indicators and liquidation price estimates directly in the trading interface. Traders should:
• Monitor their account health score, which updates dynamically based on current positions
• Set stop-loss orders even when using cross-margin to limit downside
• Avoid over-leveraging—Kraken allows up to 5x leverage on most pairs, but higher leverage increases liquidation risk across the whole account
• Regularly review open positions and adjust collateral allocation manually if needed

  Failure to monitor these factors may result in unexpected liquidations affecting more than just one trade.

  When to Use Cross-Margin on Kraken

  Cross-margin is ideal for experienced traders managing diversified portfolios. It suits strategies such as:
• Holding multiple correlated positions (e.g., long BTC and short ETH) where gains in one offset losses in another
• Running arbitrage or hedging strategies across different pairs within the same account
• Seeking to maximize capital efficiency without locking funds per trade

  However, beginners should exercise caution. If you're unfamiliar with how margin levels are calculated or how liquidation works, isolated margin offers better control. Always test cross-margin with small positions first to understand how your equity shifts during market movements.

  FAQs

  Q: Can I switch from cross-margin to isolated margin after opening a position?A: No—you cannot change the margin mode of an open position. You must close the existing trade first, then reopen it under the desired margin mode. Attempting to modify an active position will result in an error.

  Q: Does Kraken charge different fees for cross-margin versus isolated margin?A: No. Kraken applies the same taker and maker fee structure regardless of margin mode. Fees are based on your 30-day trading volume and are displayed in real time on the trading page.

  Q: What happens if my cross-margin account equity falls below the maintenance margin?A: Kraken will issue a margin call warning via email and in-app alerts. If the equity continues to drop and hits the liquidation threshold, the platform will automatically close positions starting with the most unprofitable one until the account is back above maintenance requirements.

  Q: Are staking rewards or futures balances included in cross-margin collateral?A: No. Only spot balances and open margin positions count toward cross-margin collateral. Staked assets, futures balances, and funds in separate sub-accounts are excluded from the collateral pool.