Futures Margin Mode Explained: Difference Between Isolated and Cross Margin

In futures trading, the margin mode affects how position risk is calculated. Common margin modes include Isolated Margin and Cross Margin.

Under different margin modes, the source and scope of margin used by a position are different. This may affect risk control, margin usage, and liquidation price. Users should choose a suitable margin mode based on their trading habits and risk tolerance before trading.

Isolated Margin means that each position uses its own separate margin.

The risk of the position is mainly covered by the margin allocated to that position, and it will not automatically use other available funds in the futures account.

Simply put:

Isolated Margin = Each position manages its risk independently.

For example:

A user opens an isolated BTC/USDT futures position. This position only uses the margin allocated to that position.

If the position loss increases, the risk mainly affects the margin of that position and will not automatically use other available balances in the futures account.

Isolated Margin is more suitable for users who want to manage the risk of each position separately.

Main features include:

Relatively independent risk:
The margin and risk of each position are calculated separately and will not automatically use other positions or account balances.

Easier loss control:
Users can more clearly understand how much margin may be affected by the current position.

Suitable for new users:
For users who are new to futures trading, Isolated Margin is easier to understand and more convenient for controlling the risk of a single trade.

Manual margin adjustment:
When position risk increases, users may manually add margin to reduce liquidation risk.

Cross Margin means that a position can share the available margin in the futures account.

When a position incurs losses, the system may use the available balance in the futures account to maintain the position, providing more risk buffer for the position.

Simply put:

Cross Margin = Funds in the futures account jointly support position risk.

For example:

A user holds a BTC/USDT position under Cross Margin. If the position loss increases, the system may use other available balances in the futures account to maintain the position.

This may provide a larger risk buffer for the position, but it also means that more funds in the account may be affected by that position.

Cross Margin is more suitable for users with experience in position risk and account fund management.

Main features include:

Higher capital efficiency:
The available balance in the futures account can provide more margin support for positions.

Possibly larger liquidation buffer:
During short-term market volatility, the available balance may help reduce the risk of liquidation.

Wider risk impact:
If the market continues to move against the position, losses may affect more funds in the futures account.

More suitable for experienced users:
Cross Margin requires users to continuously monitor overall account risk and is not suitable for trading without a clear risk management plan.

Isolated Margin may be more suitable in the following situations:

The user wants to manage the risk of a single trade separately;
The user does not want one position to affect other funds in the account;
The user is new to futures trading;
The user wants to manage the margin of each position more clearly;
The user is placing short-term trades or testing a strategy.

The advantage of Isolated Margin is that the risk boundary is clearer, making it easier for users to understand the possible loss range of a single position.

Cross Margin may be considered in the following situations:

The user is familiar with futures trading rules;
The user wants account funds to provide more buffer for positions;
The user can continuously monitor account risk ratio and margin changes;
The user has a clear position management and stop-loss plan;
The user wants more flexible use of account funds.

Please note that although Cross Margin may reduce the probability of a single position being liquidated quickly, if the market continues to move unfavorably, more funds in the account may be affected.

Margin mode cannot be switched freely. Users should confirm whether they are using Isolated Margin or Cross Margin before opening a position.

Margin mode affects position risk calculation, margin usage, and liquidation price. Therefore, when there are existing positions or active orders, users may not be able to switch the margin mode directly.

Before changing the margin mode, users are advised to check whether there are:

Open positions;
Unfilled orders;
Conditional orders;
Take Profit / Stop Loss settings;
Other orders or positions related to the trading pair.

If the page does not support switching, users need to handle the related positions or orders first, then follow the instructions shown on the 100X App.

Users should carefully confirm the margin mode before placing an order to avoid affecting position risk management due to selecting the wrong mode.

Isolated Margin and Cross Margin are only different margin management methods and cannot eliminate the risks of futures trading.

Under Isolated Margin, users may still be liquidated due to market volatility.

Under Cross Margin, although the available account balance may provide more buffer for a position, it may also expose more funds to risk.

Users should choose a suitable margin mode based on their own risk tolerance, set leverage reasonably, control position size, and use take profit and stop loss properly to avoid excessive leverage, full-position trading, or emotional trading.