Isolated Margin

Isolated margin is a margin trading mode where each position has its own separate pool of collateral. Unlike cross margin, your other funds and positions are not affected if one position gets liquidated.

How Isolated Margin Works

In isolated margin mode:

• Each position has dedicated collateral
• Only the assigned margin is at risk per position
• Liquidation of one position doesn't affect others
• You can add or remove margin from individual positions

Example:

• Account balance: $10,000
• Position A: $2,000 isolated margin (BTC Long 10x)
• Position B: $1,000 isolated margin (ETH Long 10x)
• Remaining balance: $7,000 (safe from both positions)

If Position A is liquidated, you lose only $2,000. Your $7,000 balance and Position B are unaffected.

Benefits of Isolated Margin

1. Risk containment — Maximum loss is predetermined 2. Position independence — Each trade is separate 3. Clearer risk management — Know exactly how much you can lose 4. Better for beginners — Simpler to understand and manage 5. Strategy testing — Test new strategies without risking entire account

Drawbacks of Isolated Margin

1. More easily liquidated — Less collateral backing each position 2. Lower capital efficiency — Funds are locked per position 3. Manual margin management — Need to add margin manually 4. No hedging benefit — Profitable positions don't help losing ones

When to Use Isolated Margin

• You're a beginner learning margin trading
• Making high-leverage trades
• Testing new strategies
• Trading volatile or unfamiliar assets
• You want to limit maximum loss on a trade