Under Multi Asset Margin (MAM), Auto Conversion triggers when you lack sufficient settlement currency to cover realised losses, fees, or funding. The system automatically converts the required amount from another margin currency. To avoid Auto Conversions, keep a small balance of each settlement currency in your account.
When does a negative margin balance not trigger Auto Conversion?
Under Multi Asset Margin, you can hold a negative margin balance in the settlement currency as long as it stems from unrealised PNL and is supported by assets in another margin currency. In these scenarios Auto Conversion does not take place, because the loss has not yet been realised and your overall margin remains adequate.
What triggers Auto Conversion?
Auto Conversion occurs when you have insufficient funds in the settlement currency to cover realised losses. Common causes include realising negative unrealised PNL or paying fees and funding. When either event creates a shortfall, the system automatically converts the required amount from another margin currency to cover the negative balance in your settlement currency.
How can I avoid Auto Conversions?
To prevent Auto Conversions, keep a small balance of each settlement currency in your account. This buffer helps absorb any funding or fee payments that might otherwise cause your settlement currency balance to go negative, removing the need for the system to convert from other margin currencies.