Cross margin vs isolated margin, with real numbers

When you open a leveraged position on a perpetual future, the exchange asks one question before the trade: cross or isolated? The choice decides which money backs the position. In cross mode, your whole account balance stands behind it. In isolated mode, only the margin you put on that one position does. Neither mode makes a trade better or worse. They change where the liquidation sits, how much you can lose, and whether one bad position can drag down the others. This guide runs the same BTC trade through both modes, with the numbers worked out, so you can see the difference instead of reading about it.

How a liquidation actually happens, step by step, is covered in our liquidation glossary entry. Here we only look at the choice of mode.

The two modes in one paragraph each

Cross margin. All your cross positions share one pool of margin. OKX puts it plainly: in cross mode, "all cross positions under the same margin asset share a unified margin balance". Gains on one position support another, and the liquidation price sits further away because the whole balance is behind it. The cost: if things go wrong, the loss can reach the whole balance, along with every cross position in it.

Isolated margin. Each position gets its own margin, set when you open it. OKX's wording: "during liquidation, your maximum loss is confined to the margin of that specific position." The liquidation price sits closer, because less money stands behind the trade. But a liquidation in one isolated position does not touch the rest of the account.

Kraken's derivatives wallet offers the same two choices, and the Orderly docs sum up the trade-off in one line each: cross "can trigger account-wide liquidation", isolated means "only the single isolated position is liquidated".

The setup: one account, one trade

To keep the numbers honest, we use the published rules of one venue, Hyperliquid, whose docs give the liquidation formula in full. Other exchanges use different maintenance rates and fees, so their exact prices differ, but the shape of the result is the same.

• Account: $2,000 in collateral, nothing else open.
• Trade: long 0.1 BTC at an entry of $60,000. That is a position worth $6,000.
• Leverage: 10x, so the initial margin is $6,000 / 10 = $600.
• Maintenance margin: Hyperliquid sets it at half of the initial margin at maximum leverage. BTC's maximum is 40x, which works out to 1.25% of the position: about $75 at entry.

The liquidation price comes from the formula in Hyperliquid's docs: liquidation price = entry − margin available / position size / (1 − maintenance rate), for a long. "Margin available" is the only thing that changes between the two modes.

• Isolated: margin available = the $600 you assigned, minus the $75 maintenance.
• Cross: margin available = the whole $2,000 account, minus the same $75.

We leave fees, funding and slippage out of the sums to keep them readable. They all move the liquidation price closer, never further. Funding in particular is paid out of margin on a schedule; see how the funding rate works.

Side by side

Two readings of the same table:

• Isolated survives less, but loses less. It liquidates on a fall to about $54,684. When that happens, the $600 is gone and the other $1,400 is untouched.
• Cross survives more, but risks more. It only liquidates on a fall to about $40,506. If BTC gets there, you have lost about $1,949, nearly the whole account.

Three paths for the same trade

The table only shows the end points. Here is what happens along three different price paths.

Path 1: a dip to $54,000 that comes back to $60,000. In isolated mode, the price passes the liquidation level of about $54,684, the position is closed, and the $600 is lost. The recovery happens without you. In cross mode, the position never comes close to liquidation. At the low, the unrealized loss is 0.1 × ($60,000 − $54,000) = $600, and it shrinks back to zero as the price returns. Same trade, same path: one mode loses $600, the other loses nothing.

Path 2: a fall to $40,000. Isolated mode is liquidated on the way down, at about $54,684, and the loss stops at $600. Cross mode holds on much longer and is liquidated at about $40,506, by which point the loss is about $1,949. Same trade, same path: isolated loses $600, cross loses nearly $2,000.

Path 3: a second position in the same account. Say you also hold a cross position in another coin and it goes against you. In cross mode, its losses come out of the same pool, so the BTC liquidation price moves closer even though BTC has not moved. In isolated mode, each position has its own margin, so one cannot pull the other down. This is the case cross margin hides best: the liquidation price you saw when you opened the trade is not fixed.

Fast moves make all three paths worse. On a day like October 10, 2025, the price can pass through several levels before any order fills; that day is unpacked in what a big 24-hour drop actually tells you.

The stop changes the picture more than the mode

Both modes describe what happens if you let the exchange close the trade for you. Most of the damage in the table comes from letting it get that far. With a stop-loss on the same position, a stop at $58,000 limits the loss to $200, in either mode, before fees and slippage: 0.1 BTC × ($60,000 − $58,000).

That is why the margin mode is the second decision, not the first. The first is how much you are willing to lose on the trade, and from that, how large the position should be. Our guide to position sizing walks through that calculation. Once the size and the stop are right, the mode matters mainly for the cases where the stop does not fill at your price.

When each mode makes sense

A common mistake is to choose cross because the liquidation price looks safer. It is further away because more of your money is behind the trade. A distant liquidation price is not protection; it is a larger amount at stake.

Checks before you open the trade

1. Look at which mode is selected. On several venues cross is the default; Hyperliquid's docs say so explicitly. Do not assume.
2. Read the liquidation price the exchange shows, and ask how far it is from your entry in dollars, not only in percent.
3. Write down the most you can lose: the margin in isolated mode, the account in cross mode, or your stop distance if you use one.
4. Remember the margin level. OKX notes that if the margin level falls to or below 100%, the position may be reduced or liquidated. Every venue has an equivalent line.
5. Check where you can trade at all. Perpetual futures are licensed products in many places. In the EU, start with how to check a MiCA-licensed exchange.

FAQ

What is the difference between cross and isolated margin?

In cross margin, all cross positions share your account balance as margin, so a loss can reach the whole balance. In isolated margin, each position has its own margin, and a liquidation costs only that margin.

Is isolated margin safer than cross margin?

It caps the loss per position, which makes the worst case smaller and easier to see. But it liquidates sooner, because less money backs the trade. Safer depends on whether you fear a large loss or an early exit more.

Why is my liquidation price further away in cross mode?

Because the whole account stands behind the position. In our example, the same 0.1 BTC long liquidates at about $54,684 in isolated mode and about $40,506 in cross mode, only because $2,000 instead of $600 is backing it.

Can I change the margin mode after opening a position?

It depends on the venue. OKX, for example, does not let you switch an open position between modes. In isolated mode, Hyperliquid lets you add or remove margin after opening, which moves the liquidation price.

Does a stop-loss make the margin mode irrelevant?

Not entirely. A stop sets the loss when it fills at or near your price. In a fast market it can fill worse, and then the mode decides how much more is at risk.