Isolated and cross mode differences

Isolated mode and cross mode are two different margin modes, you can choose the leverage multiple and different margin modes on the trading page. The leverage multiple is related to the position margin of isolated mode and the initial margin of cross mode.

  • In the two-way position mode, you need to set the leverage multiple for long and short respectively.
  • In one-way position mode, you only need to set the leverage multiple once.
Trading Modes – Cross and Isolated

Isolated mode

In the isolated mode, the position margin is a fixed value. The initial margin can be changed by adjusting the leverage, risk limit, etc. When the margin balance is lower than the maintenance margin, a liquidation is triggered. At this time, the amount of the position margin is the maximum loss that the user needs to bear.

The isolated position margin= Number of open positions * Average opening price/leverage multiple.

Suppose you buy a position of 0.1 BTC on BTCUSDT futures at 50,000USDT, with a starting leverage multiple of 25x,

The isolated position margin = 50000*0.1/25= 200USDT

If the position held by the user is liquidated due to price fluctuations, it will only lose the amount of margin held in that direction and will not affect other funds in the futures account.

Cross mode

In the Cross mode, all balances in the user’s futures account are used as a margin for the position. Users can set positions under multiple futures to the full position mode, and all positions set to the full position mode can share the account balance as margin. However, the unrealized profit and loss of the profitable position cannot be used as margin for other positions.

Cross initial margin = number of open positions * average opening price/leverage multiple

Cross position margin = All balances of the futures account

Suppose you buy a position of 0.1 BTC on BTCUSDT futures at 50,000USDT, the leverage multiple of the full position is 25x, and the full position is 1000USDT

Cross initial margin = 50000 * 0.1 * 25% = 200USDT

However, its cross-position margin is still 1000USDT. All available funds in the futures account are considered margin and will be liquidated when the loss of the position exceeds the account balance.

Summary

Isolated mode and cross mode are two margin modes, users can flexibly choose according to their own needs. The isolated position margin is a fixed value, users can better control the risk and margin. The cross position margin is all funds in the futures account, which can be simpler and easier to understand.

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The content of this webpage is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives, and specific financial circumstances. Investment involves risk.

Please note that the information and data above are cited from third-party sources & whitepapers and do not represent MEXC. Please refer to direct sources for more details. This is not financial advice and does not constitute an offer or solicitation to offer or recommend any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives, and specific financial circumstances. Investment involves risk.

This disclaimer informs readers that the MEXC Creator’s content, views, thoughts, and opinions expressed in the articles belong solely to the creators and authors, and not to MEXC Global itself. MEXC Global doesn’t give any investment recommendations or advice.

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