Cross Margin vs Isolated Margin: Which Should You Use?
Updated · 2 min read
Cross margin uses your whole account balance as collateral for every cross position. Isolated margin ring-fences a fixed amount of collateral for one position. Cross makes liquidation less likely but lets one bad trade drain the account. Isolated caps your loss at the margin you assigned but gets liquidated sooner.
- Cross: shared collateral, unrealized profit on one position supports others, liquidation risk is account-wide.
- Isolated: fixed collateral per position; only that margin is at risk.
- Cross liquidation price depends on account equity; isolated liquidation price depends on the assigned margin.
- Some prop firms require cross or isolated and ban portfolio margin (HyroTrader on Bybit).
Side by side
| Cross margin | Isolated margin | |
|---|---|---|
| Collateral | Whole account balance | Only the margin you assign |
| Max loss | Entire cross balance | Assigned margin |
| Liquidation | Later, account-wide | Sooner, position-only |
| Unrealized PnL | Available as margin for other positions | Stays with the position |
| Adjust margin | Deposit more to the account | Add or remove margin on the position |
| Best for | Hedged books, a few positions you monitor | Speculative trades, high leverage |
Example
$10,000 account, $50,000 BTC long
- Cross: all $10,000 backs the position. BTC must fall ≈ 18–19% before liquidation (depending on maintenance rate).
- Isolated with $5,000 assigned (10x): liquidation after ≈ 8–9%. The other $5,000 is untouched.
- Cross wins if BTC dips 12% then recovers; isolated wins if BTC keeps falling 30%.
Portfolio and unified margin
Some venues offer portfolio margin, which nets risk across assets (Hyperliquid's portfolio margin counts HYPE, BTC, USDC and USDT). It's the most capital-efficient mode and the least forgiving if correlations break. Prop firms that route through exchange sub-accounts often ban it. HyroTrader requires cross or isolated on Bybit because portfolio margin interferes with evaluation tracking.
Frequently asked questions
Is isolated margin safer than cross margin?
It limits the damage from one position, but each position is closer to liquidation. Safer for the account, riskier for the individual trade.
Can I switch from isolated to cross on an open position?
Usually not while the position is open. Some assets on Hyperliquid are 'strict isolated', where margin can't be removed at all.
Sources
Educational content, not financial advice. Perps and prop evaluations are high-risk; firm rules change, so check each firm's current terms.