Cross Margin and Isolated Margin
Margin systems are divided into Isolated Margin and Cross Margin.
Cross Margin refers to a margin system in which available margin balance is shared across all open positions in cross margin mode of the same collateral. The total equity in your account is considered when calculating margin requirements and liquidation thresholds. Profits made on winning positions can help offset losses on losing positions. If the total equity falls below the liquidation threshold, all positions may be at risk of liquidation.
Isolated Margin refers to a margin system in which margins are not shared across symbols and instead allocated to each individual position. The margin allocated to trade is independent of other positions or the overall account equity. Each position's margin is ring-fenced, so profits or losses in one position do not affect the margin or equity of other positions. This allows you to limit potential losses to the margin allocated to each trade.
In simple terms, cross margin shares the available margin across all positions, allowing profits in one position to compensate for other losses. Isolated margin allocates a specific margin to each position, isolating the risk of each trade. Cross margin provides flexibility but carries the risk of all positions being liquidated if the total equity falls below the threshold. Isolated margin provides risk containment but requires careful margin management for each position.
Risk Warning:
Trading in cryptocurrency involves risk and potential losses. Before trading, please make your investment decisions cautiously by considering your investment objectives, experience, and risk tolerance. You are solely responsible for your investment decisions, and Flipster is not liable for any losses you may incur. Derivatives trading, in particular, is subject to high market risk and price volatility. Please obtain independent advice where appropriate. This information should not be construed as financial or investment advice.