Cross Margining

Thanks to the Great Depression of the 1930s, where everyone was buying stocks via brokerage loans, you now have to put up cash as a “margin” whenever you're buying stock options or futures.

Cross margining allows you to use stocks you already own in other accounts, as an offset to what you would owe as a margin for investing in futures.

If you couldn't do cross margining, you would have to put up a lot more cash to invest in stock futures or options, as well as index futures or options. That is…cross margining allows you to take tons of risk when you’re investing in risky things.

It ain’t necessarily good. It’s just...a thing.