The difference between Isolated Margin and Cross Margin – Help Center

Content of this article：

How to switch between cross margin / isolated margin mode?

Is cross margin and isolated margin interchangeable when having an open position?

There are two margin modes on XTrust: Isolated margin mode and Cross margin mode.

What is the Isolated Margin mode?

The isolated margin mode depicts the margin placed into a position is isolated from the trader's account balance. This mode allows traders to manage their risks accordingly as the maximum amount a trader would lose from liquidation is limited to the position margin placed for that open position.

For example, a trader opens a quantity of 1500 BTCUSD position at $10,000 by using 1x leverage. The initial margin used to open the position is 0.15 BTC. Now, he changes the leverage to 3x. The initial margin required (collateral) will then change from 0.15 BTC to only 0.05 BTC. In the event of liquidation, he will only lose the 0.05 BTC initial margin (excluding fees). This allows the trader to limit his risk.

What is the Cross Margin mode?

It is default margin mode on XTrust. The cross margin mode uses all of a trader’s available balance within the corresponding trading pair coin type to prevent liquidation. When the trading pair's equity is lower than the maintenance margin, the position will be liquidated. In the event of liquidation, the trader will lose all his/her equity for that particular trading pair.

For example, a trader opens a BTCUSDT position. When the BTCUSDT position is liquidated, he will lose all of his USDT balance. BTC balance will not be affected.

How to switch between cross margin / isolated margin mode?

Visit the contract trading screen and click on cross margin / isolated margin in the top right corner of the screen.

Is cross margin and isolated margin interchangeable when having an open position?

Traders can always change the margin mode from the order zone. When a margin mode is changed, it will be applied to the opened position and any active & conditional order. Any margin changes made will affect the liquidation price of the position. Hence, cross margin and isolated margin are interchangeable anytime whenever the account has a sufficient margin and the change itself doesn't trigger immediate liquidation.