In isolated mode, each position has its own margin. If it is liquidated, you lose that margin and nothing more, and your other positions are unaffected. In cross mode, all positions share the account's available balance. A losing position keeps drawing on free balance, which pushes its liquidation price further away but puts the whole balance at stake.
Example
You have $5,000 in your futures wallet and open a $10,000 BTC long with $1,000 of margin. In isolated mode, liquidation comes after a drop of roughly 9–10% and costs $1,000. In cross mode, the full $5,000 backs the trade, so price would have to fall close to 50% before liquidation, and if it does, all $5,000 is gone.
Why it matters
The margin mode decides what a single bad trade can cost. Isolated margin caps the damage per position, which suits traders who size every trade separately. Cross margin can survive wicks that would liquidate an isolated position, but it removes the automatic ceiling on losses.
Common mistake
Using cross margin as a reason to skip stops. Without a stop, a losing cross position can slowly consume the entire account. If you trade cross, keep a hard stop on every position and size it from your risk, not from the margin the exchange shows.
Put it into practice
FAQ
- Which is safer, isolated or cross margin?
- Neither is safe on its own. Isolated limits the loss to the assigned margin; cross lowers the chance of liquidation by a wick but can lose the whole balance. A stop loss and sensible position size matter more than the mode.
- Can I switch between isolated and cross?
- Most exchanges let you choose per contract, but usually only while you have no open position or open orders on that contract.
- Does cross margin share profits between positions?
- Yes. Unrealised profit on one position counts as available margin for the others, which is why a winning trade that reverses can suddenly bring another position closer to liquidation.