Isolated margin is a margin trading mode where collateral is separately allocated to each individual position, effectively containing risk to that specific trade.
Isolated Margins
What Is Isolated Margin?
Isolated margin is a margin trading mode where collateral is separately allocated to each individual position, effectively containing risk to that specific trade. Unlike cross margin, where your entire account balance can be used to support any open position, isolated margin protects your remaining funds if a trade is liquidated.
Why It Matters for Crypto Traders
- Enhanced Risk Control
If a position reaches its liquidation threshold, losses are limited strictly to the margin assigned to that trade—safeguarding your broader portfolio. - Precise Position Management
Traders can tailor margin and leverage per position, enabling fine-tuned risk exposure—ideal for trading volatile assets like altcoins. - Feature Innovation Across Exchanges
- Major platforms like Binance, Bybit, KuCoin, and OKX all offer isolated margin modes for enhanced control.
- BingX recently introduced a “Separate Isolated Margin Mode” for futures—allowing multiple trades in the same pair, each with its own margin parameters, further optimizing flexibility.
Pros & Cons of Using Isolated Margin
Advantages
- Limits losses to the allocated margin for a given position
- Ideal for managing voluminous or volatile asset positions
- Simplifies risk strategy per trade
Risks & Considerations
- Higher liquidation risk if insufficient margin is allocated
- Requires close monitoring and active margin management
- Doesn’t allow profit from other trades to buffer losses