Margin Account at CrossTower

Certain eligibility requirements do apply.

1. CrossTower offers an isolated Margin account that is separate from your Trading account. To utilize Margin Trading, you must add funds to the Margin account in each currency pair you would like to trade. 
2. After Margin is enabled on your account, click on + Margin icon at the top left of Account Tab and in the pop up shown below you can move funds from your Trading Account to your Margin Account per Currency Pair.
3. Any non-reserved margin can be freely moved out of your account. Funds are reserved when you have an active position. Once the position is closed, the funds are no longer reserved and immediately available.

Margin Concepts

1. Initial margin is the amount of funds required to initiate an options position. The initial margin will be set to fifty percent.  At fifty percent, you will have 2X leverage.

a. Initial Margin or buying power will be immediately updated as new funds are added to your margin account. As you trade, CrossTower requires a Maintenance Margin of 33% and will issue a margin call when your Margin Percentage drops below 33%

2. Maintenance margin (MM) is the minimum amount that must be maintained at any given time in your account relative to margin used. 

a. MM is set to 33%, and anytime the MM falls below 33% CrossTower may issue a Margin Call.

b. A customer may fund their Margin account using either USD, USDC or BTC. 

3. Margin Recalculation Frequency and Impact to Customer

a. Maintenance Margin (MM) is recalculated every 5 seconds using the Midpoint of the Highest Bid and Highest Sell for orders bought using margin to calculate the current order value.

i. For example: BTC/USD is trading at 13500 to Buy and 13510 to Sell. The Midpoint will then be 13,505. 

ii. Customer bought long 0.1 BTC on Margin - The Order Value is then 1,350.5 (MM Required - 337.625)

b. Subsequently the price of Bitcoin increases to 14,000 (buy) and 14,010 (sell) then the MM is 350.13. If the account has lower than the MM deposited, then exchange will issue you a Margin Call. 

c. Depositing the difference between current deposited value and the new MM will prevent a liquidation event.

4. Liquidation of Positions and Repayment of Net Outstanding Positions 

a. Post Liquidation you will still be responsible for repayment of outstanding balances.

b. Using 2X leverage with a short of 0.5 BTC

i. With 2X leverage, positions require necessary collateral, to be present in the margin account. 

1. This collateral is necessary to keep the position open in the event of an adverse price movement. 

2. In the event of liquidation, then you will be responsible for the price difference of 500*0.5 -> $250 to be paid prior to the account being unlocked for trading

ii. Excessive liquidations could cause you to lose margin trading privileges and have remaining margin positions liquidated by CrossTower.

5. Using margin, you can take short positions in your CrossTower Margin Account

a. When taking a short position, you will profit when the asset you short drops in value and you could lose money when the asset appreciates in value.

b. To engage in a short position:

i. Ensure you do not have a long position in the asset pair you would like to short. Any selling will first sell existing positions.

ii. You can short sale by selling the crypto asset pair. When you short sale, CrossTower will hold the opposite currency in the central risk account.

1. For example, Short Sale 0.5 BTC/USD, then (BTC/USD= 14,000) – CrossTower will reduce your margin account by 3,500 and then hold the 7,000 in the risk account. All profits and losses will be attributed to you.

Margin Interest

Interest shall be charged on your Customer Margin Account:

• Every eight hours in which a position is open;
• Subject to a daily rate of 0.039% per day for USD and USDC; and
• At a rate of 0.018% per day for BTC.

CrossTower reserves the right to change the interest rate based on market factors, the costs of borrowing and lending funds, and any other reason in CrossTower’s sole and reasonable discretion. Upon reasonable notification to you, CrossTower may adjust the interest rate computation schedule as outlined above.  Reasonable notification can include, but is not limited to, posting on the CrossTower Trading Platform, per CrossTower Terms of Use, email notification, or other means in CrossTower’s sole and reasonable discretion.