1. Cross margin
Cross margin mode uses all available balance of the corresponding asset in the account as shared margin for all positions.
How it works: When a position incurs losses, the account balance is automatically used to support margin requirements and help prevent liquidation.
Advantages: Stronger risk absorption capacity, suitable for long-term trading or hedging strategies, and helps reduce the risk of a single position being liquidated due to short-term volatility.
Disadvantages: If liquidation occurs, the entire balance of the corresponding settlement asset (e.g., USDT) in the account may be lost.
Example: If you have 1,000 USDT in your account and open cross margin positions in BTC and ETH. If BTC declines sharply, the system will automatically use available balance to maintain margin until the account margin ratio reaches 100%.
2. Isolated margin
In Isolated margin mode, the margin allocated to each position is independent of the account balance.
How it works: Each position's risk is isolated. A position can only use the margin assigned at order placement, as well as any additional margin manually added later.
Advantages: Risk is clearly defined and contained . Even if a position is liquidated, the loss is limited to the margin allocated to that position, while the remaining account balance is not affected.
Disadvantages: Lower tolerance to market volatility. If margin is not added in time, the position is more likely to be liquidated during price fluctuations.
Example: If you have 1,000 USDT in your account and allocate 100 USDT to open an isolated BTC position. If the position is liquidated, you will only lose the 100 USDT margin, while the remaining 900 USDT in your account remains unaffected.