Cross margin vs. isolated margin
Which balance backs your leveraged position — just the collateral you assigned, or your whole account? The answer sets your liquidation price.
Both margin modes define which balance backs your leveraged positions, and therefore how liquidation risk is calculated.
Isolated margin
With isolated margin, you allocate a specific amount of collateral to a position, and only that. If the market turns against you and the position is liquidated, your maximum loss is the amount isolated there — the rest of your account stays untouched.
It's predictable and well-suited to high-conviction directional trades or heavily leveraged ones, because it fences off the risk. The downside: since the margin is limited, the liquidation price sits closer, and the position closes earlier on a swing.
Cross margin
With cross margin, your entire available account balance (your margin wallet) acts as shared collateral across positions. This pushes the liquidation price further away, because more margin absorbs temporary losses, and it lets one position's profit offset another's loss.
It's useful for hedges and portfolios with several correlated positions. The risk: a single bad trade can consume your whole balance, and a liquidation can pull in more capital than you expected.
In short
Isolated caps loss per position at the cost of liquidating earlier. Cross withstands volatility better at the cost of exposing the whole account. Traders typically reach for isolated on high-risk bets and cross for portfolio management and hedges.
Why it matters. Leverage doesn't just amplify your gains and losses — the margin mode decides how much of your money is standing behind each bet. Picking the wrong mode is how a trader who was "right" still gets liquidated, or how one careless position quietly drains an entire account. It's a setting, but it's really a risk-management decision.
Leverage magnifies losses as well as gains; positions can be liquidated in full. This is educational information, not trading advice.