Cross vs. Isolated Margin: Which Should You Use?

Cross and isolated are the two margin modes that decide what's at risk behind a leveraged position. Picking the wrong one is a common, avoidable way to turn a small loss into a large one. (For the bigger picture, see Leverage and risk, explained.)

Isolated margin

Only the margin you assign to that one position is at risk. If the trade goes wrong, the most you can lose is that assigned amount — the rest of your balance is untouched.

• Upside: a predictable, capped maximum loss per position.
• Downside: less buffer, so the position is liquidated sooner on an adverse move.

Isolated suits defined-risk, single bets — and beginners — because the worst case is known in advance.

Cross margin

Your entire account balance backs the position (and any others in the same account). Losses can draw on the whole balance, which gives the position more room before liquidation.

• Upside: more buffer — a brief wick is less likely to liquidate you.
• Downside: a single bad trade can reach your whole balance, not just one position's margin.

Cross suits hedged or offsetting positions, and traders who'd rather add cushion than be liquidated by a short-lived spike — at the cost of putting everything on the line.

When to use which

• Isolated — you want a hard, known cap on a position's downside; you're new; you're taking one directional bet.
• Cross — you're running multiple positions that partly offset, or you specifically want to avoid premature liquidation and accept the larger blast radius.

A quick example

Say you have $1,000 and open a position with $100 of margin. In isolated mode, the most that trade can cost you is $100. In cross mode, the same position can keep drawing on the full $1,000 — surviving longer, but able to lose far more if it keeps going wrong.

Either way, the position can still be liquidated — the mode only changes how much is exposed when it is.