Isolated vs. cross margin: where the risk sits
The same leveraged position can be liquidated at very different prices, depending on whether your whole balance or only a slice of it stands behind it.
How this was made: an AI assistant drafted this guide under the operator's direction, and the numbers were checked against the calculators on this site. Nothing here is investment advice. Leveraged products can lose your entire margin.
The one-line difference
In isolated margin mode, each position has its own margin and can only lose that margin. In cross margin mode, all your free balance backs every open position, so one position can draw on money you meant for another.
Isolated margin
You decide how much margin goes into a position. If the price moves against you until that margin is used up, the position is liquidated and you lose that margin and no more, apart from fees. The rest of your account is untouched.
The cost is a liquidation price that is nearer to the entry, because there is less money behind the position. You can add margin by hand, which moves the liquidation price away.
Cross margin
Your whole balance, minus the losses on your other positions, counts as margin for each position. The liquidation price is therefore much further away, and a short spike is less likely to close you out.
The cost is that the risk is the whole account. A losing position keeps drawing on the same pool, and if the loss grows large enough, everything in it can be lost. A second losing trade makes the first one's liquidation price move closer.
The same position in two modes
Take 0.1 BTC long at 60,000 with 10x leverage and a 0.5% maintenance margin rate, and an account balance of 1,000.
| Mode | Liquidated at | Below entry | Margin behind it |
|---|---|---|---|
| Isolated, 600 margin | 54,271.36 | 9.55% | 600 |
| Cross, 1,000 balance | 50,251.26 | 16.25% | 1,000 |
| Cross, other trade 300 down | 53,266.33 | 11.22% | 700 |
Cross margin moves the liquidation price from about 9.5% to about 16.3% below the entry, which looks safer, until you notice what it costs: the whole 1,000 is at stake in this one position instead of 600. And once another position loses 300, the cross liquidation price creeps back up to about 11.2% below.
What each mode is for
- Isolated fits when you want a hard cap on what one position can lose, or you run several unrelated positions.
- Cross fits when you hold hedged positions that offset each other, or want to avoid being closed by a short spike while you can afford the loss.
Neither is safer by itself. They move where the risk sits: isolated puts it in each position, cross puts it in the account.
Other systems
Some exchanges offer unified or portfolio margin, which nets the risk of positions against each other and can allow more leverage on a hedged book. The formulas differ and are exchange-specific, so this page and the calculator cover the two basic modes only.
Check before you click
- Which mode is the position in? It can be changed per contract, and in some exchanges it cannot be changed while a position is open.
- What does the exchange show as the liquidation price after you add margin or open another position?
- How much of your account is behind this position right now?