Before you can place your first margin trade you need to allocate some funds as Collateral.
These funds act as an artificial security for the borrowed funds you automatically receive when margin trading. Funds allocated as collateral are locked while selected and cannot be withdrawn or used for any other purpose until the positions are closed. You may inmediately release funds from collateral if you have sufficient free margin.
Only certain assets may be allocated as collateral, initially restricted to major assets and XCM. Other fiat currencies and major cryptos will be added in the future. One of your collateral allocations must be designated to be the primary. If you have only allocated funds from one asset to collateral then that allocation is automatically the primary.
With more than one allocation a primary selector in the collateral panel lets you choose the primary. Closed profits and losses from margin trading are settled to the wallet for the primary, and will be automatically added to (or deducted from) the collateral allocation for that asset.
For example, if you allocate 1000 EUR as your primary collateral, then the profit or loss for any margin trade will be automatically converted to EUR on settlement (when the trade closes), regardless of which currency pair was traded. Alternatively, if you have allocated BTC or another crypto, as your primary collateral, then all profits and losses from margin trading will be converted to BTC or that crypto, on settlement.
With multiple collateral allocations it is possible that a large trading loss could exceed the value of your primary allocation. If this happens the current primary allocation is used to cover part of the loss and the next largest collateral allocation would become the new primary, with any remaining loss being deducted from that. (This process can repeat over multiple collateral allocations until theloss is completely covered.)
For more on this or other topics, please don't hesitate to contact us if you have more questions.
-CoinMetro's Customer Support