Isolated margin assigns collateral to one position. Cross margin allows positions to draw from a shared account pool. The choice changes what collateral is exposed, how liquidation is evaluated, and how one open position can affect another.
Think of one wallet versus a shared wallet
Isolated margin gives one position its own collateral bucket. Cross margin lets several positions use a shared collateral pool. Isolated creates a clearer boundary; cross gives more shared support but connects the risks.
- In isolated mode, a losing position normally uses only the margin assigned to it.
- In cross mode, eligible account equity can help a position stay open.
- The same shared equity can also be consumed by losses, orders, fees, or funding elsewhere.
- Isolated margin
- Collateral assigned to one position.
- Cross margin
- Eligible collateral shared across a risk pool.
- Equity
- Account value after adding profits and subtracting losses and applicable costs.
Cross and isolated margin at a glance
Neither mode is universally safer. Isolated margin creates a clearer position-level boundary. Cross margin can provide a larger buffer, but it also connects the risk of every position sharing the collateral pool.
| Question | Isolated margin | Cross margin |
|---|---|---|
| Collateral scope | Assigned to one position | Shared account or currency pool |
| Liquidation test | Primarily position-level | Account maintenance ratio |
| Effect of other positions | Normally limited | Can materially change the buffer |
| Adding margin | Explicit position action | Available equity is shared |
| Risk boundary | Easier to define per trade | Portfolio-level and dynamic |
How isolated margin works
When a position is isolated, the exchange evaluates it using the margin assigned to that position, its unrealized PnL, maintenance requirement, and applicable costs. Other account balances are not automatically committed unless an auto-add-margin feature is enabled.
This makes isolated mode useful when the trader wants a deliberate collateral limit for one idea. Adding extra isolated margin moves the liquidation line farther away, but it also increases the capital that can be lost in that position.
- Clearer position-level collateral allocation.
- One liquidation is less likely to drain unrelated available balance.
- Requires active management if additional margin is needed.
- Auto-margin-replenishment settings can change the expected boundary.
How cross margin works
Cross margin uses eligible shared equity to support positions in the same risk pool. Profitable positions can improve account equity while losing positions consume it. New orders, withdrawals, funding payments, and changes in other positions can therefore move the displayed liquidation estimate.
Many exchanges trigger cross or portfolio liquidation from an account maintenance ratio rather than one immutable price. A displayed cross liquidation price is best treated as a snapshot under current assumptions.
- Uses available shared collateral more efficiently.
- Can keep a position open through a larger adverse move.
- Couples the risk of multiple positions and orders.
- Requires monitoring total equity and maintenance, not one trade alone.
A simple collateral comparison
Assume the same $10,000 long is opened with $1,000 initial margin. In isolated mode, only that assigned margin and any explicit additions support it. In cross mode, an extra $2,000 of eligible account equity may support the trade—but a $700 unrealized loss elsewhere reduces that apparent buffer.
Same position, different collateral scope
Cross margin may show a farther liquidation estimate at first, but its buffer changes with the rest of the account. Isolated margin is narrower but easier to attribute to one position.
How to choose a margin mode
The decision should follow the risk plan, not the desire to push liquidation farther away. Isolated margin often fits independent directional trades with a defined maximum collateral allocation. Cross margin can fit hedged or portfolio-aware strategies where the trader actively monitors total account risk.
- Choose the loss boundary before choosing leverage.
- Check whether auto-add margin is enabled.
- Map every position sharing the cross collateral pool.
- Keep a stop-loss separate from the liquidation threshold.
- Recalculate after adding positions, orders, or withdrawals.
Liquidation Calculator
Switch between isolated and cross margin and make the account-level collateral assumptions visible.
Frequently asked questions
Is cross margin safer than isolated margin?
Not automatically. It may provide more collateral, but it exposes shared account equity and lets other positions change the risk buffer.
Can one cross-margin position liquidate another?
A losing position can reduce shared equity and move the account closer to its maintenance threshold, affecting every position in the same risk pool.
Can I lose my whole balance with isolated margin?
The isolated allocation limits position collateral in normal operation, but auto-add settings, fees, platform rules, and other products can change exposure. Verify the exchange configuration.
Why does a cross liquidation price keep changing?
Because account equity, other unrealized PnL, reserved margin, funding, and risk requirements change over time. The displayed price is often a current snapshot.
Exchange mechanics and rates can change. These primary references were used to verify the concepts on this page.
Educational information only. Contract rules and account calculations vary by exchange; verify them before trading.