- Isolated margin limits a position's risk to the margin you assigned to it.
- Cross margin lets a position use your whole futures balance to avoid liquidation.
- For single trades with a stop loss, isolated is usually the safer, clearer choice.
Isolated vs cross margin in one table
| Isolated margin | Cross margin | |
|---|---|---|
| What can be lost | Only the margin on that position | Your whole futures balance, if things go badly |
| Liquidation price | Fixed by that position's margin and leverage | Further away, because the balance backs it |
| Best for | Single trades with a stop loss | Hedged or offsetting positions, experienced traders |
| Main risk | Being liquidated sooner on a big move | One bad trade draining every other position |
How isolated margin works
Say you open the BTC/USDT short from 3 September at 39x with $50 of isolated margin. That $50 is all the position can use. If price runs far enough against you, the position is liquidated and you lose the $50, and nothing else in your account is touched. With the stop at 82,567.73, the trade would normally close at the stop well before that, for about -60% of the $50.
How cross margin works
With cross margin, the same position can draw on your entire futures balance. Liquidation moves further away because there is more money behind it. That sounds safer, but it means a position without a stop, or one where the stop fails in a fast market, can keep losing until it eats into everything else.
Which is better: isolated or cross margin?
For following signals, isolated margin is usually the better fit:
- Every signal has a defined stop, so you already know the worst case for the trade; isolated margin enforces it.
- Risk per trade is easy to see: it is the margin you assigned.
- Several open signals cannot drag each other down.
Cross margin has its uses: experienced traders running hedges, or positions that offset each other. If you use it, a stop loss on every position is not optional.
Margin mode and liquidation
Isolated positions liquidate sooner, because only their own margin absorbs losses. That is why the stop must sit well before the liquidation price. At very high leverage, the two can be close; our guide on how to calculate liquidation price shows how to check this before you enter.
How to switch margin mode
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Frequently asked questions
What is the difference between isolated and cross margin?
Isolated margin limits a position to its own margin; cross margin lets it use your whole futures balance.
Is isolated or cross margin better for beginners?
Isolated, combined with a stop loss on every trade, because the most you can lose on a trade is clear.
Does cross margin reduce liquidation risk?
It moves liquidation further away, but if a position does fail, more of your balance is at risk.
Can I change margin mode on an open position?
Usually not; most exchanges require the position and its orders to be closed first.
Which margin mode should I use for signals?
Isolated, with the signal's stop loss, sized so a stop-out costs a small part of your account.
Risk warning: trading crypto, forex and other markets with leverage carries a high risk of loss, and you can lose more than you deposit. This article is education, not financial advice. Past results do not guarantee future results.