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What is Auto Conversion and How Does It Work?

  • Updated

Having a Negative Margin Balance Under MAM

Under Multi-Asset Margining (MAM), you can have a negative margin balance in the Settlement Currency as long as it is coming from Unrealised PNL (Profit and Loss) and supported by assets in another Margin Currency. Auto Conversion will not take place in these scenarios. 

 

What Triggers Auto Conversion?

Auto Conversion happens when you have insufficient funds in the Settlement Currency to cover Realised Losses. This can occur due to several factors, including:

  • Realising negative Unrealised PNL
  • Paying fees or funding

In these cases, if you do not have enough of the Settlement Currency in your wallet, the system will automatically convert the required amount from another margin currency to cover the negative balance in your Settlement Currency.

 

How to Avoid Auto Conversions

To prevent Auto Conversions, it’s recommended to keep a small balance of each Settlement Currency in your account. This will help absorb any funding or fee payments that may cause your balance to go negative.

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