What is the difference between cash and margin accounts?
Your Crypto Facilities account comes with different sub-accounts, which are either cash or margin accounts. If you make a deposit, it will arrive in a cash account, and you can withdraw only from cash accounts. You own two cash accounts:
If you wish to trade an instrument, you first need to make an internal transfer from a cash account to the margin account that belongs to that instrument. You own a margin account for each instrument we list:
What is the reason for segregating accounts?
Any bitcoins or Ripple XRP that sit in your cash accounts do not count as margin, meaning you cannot lose them if a trade turns against you.
Deposits made to one of your margin accounts count as margin and could be lost if a trade turns against you. Margin accounts are separate for each instrument to assure that there is no spill-over effect between positions in different instrument. For instance, assume you have a long position in the Bitcoin-Dollar Futures, as well as a position in the Ripple-Dollar Futures. If the bitcoin price declines, your Bitcoin-Dollar Futures position may get liquidated but this will have no effect on your position in the Ripple-Dollar Futures.
Margin accounts are completely independent - if you are margin called in one account, this has no effect on the other margin accounts. You can decide yourself how much margin you want to allocate to each margin account (minimum margin requirements apply).
Can I use different currencies for margin?
Currently you may only lodge collateral in the asset specified for the margin account. This means you can not use XRP, ETH, or LTC in the XBTUSD contracts. This is to avoid the need to rely on liquidity between assets to properly value net collateral. By only using the base or quote currency as collateral, the risk is atomically measured and it can be ensured there are no system leakages.