What is cross margin?
A margin mode in which every position in an account draws on one shared pool of collateral.
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In this entry
A margin mode in which every position in an account draws on one shared pool of collateral.
A profitable position can hold up a losing one, so positions survive longer before liquidation than they would under isolated margin. The cost is that a single bad trade can consume the whole balance, because there is no wall between markets.
The structural point is that cross margin does not reduce risk, it pools it. Whether pooling helps depends entirely on whether your positions actually offset each other, and unrelated speculative positions do not.
How it works
Under cross margin the exchange computes one account-level margin requirement across all open positions and compares it to your total collateral. Unrealized profit on one position counts toward the requirement of another.
Under isolated margin each position is allocated a fixed amount of collateral and is liquidated when that allocation is exhausted, leaving the rest of the account untouched.
| Mode | Collateral | Liquidation | Suits |
|---|---|---|---|
| Cross | Shared across all positions | Account-level, can take everything | Genuinely offsetting positions |
| Isolated | Fixed per position | Position-level, capped loss | Unrelated or speculative positions |
Illustrative comparison; implementations differ by venue.
Cross margin suits a hedged book where the legs genuinely offset, such as a spot holding against a short future. It is a poor fit for unrelated positions, where one blowup takes the rest of the account with it.
Most exchanges let you set the mode per market, and switching modes while a position is open recalculates the liquidation price immediately, sometimes moving it dramatically. Some venues do not permit switching at all once a position is open.
Example
Illustrative. You hold 10,000 dollars of collateral, a long position showing a 2,000 dollar profit and a short position showing a 3,000 dollar loss. Under cross margin your equity is 9,000 dollars and both positions are comfortably maintained. Under isolated margin with 3,000 dollars allocated to each, the short is approaching its allocation and is liquidated at a 3,000 dollar loss, while the long continues untouched and the remaining 4,000 dollars of collateral is unaffected. Cross margin kept the short alive. If the short then lost another 6,000 dollars, cross margin would have lost you far more than isolated margin would have.
Why it matters when you buy
Margin modes belong to derivatives trading, not to buying and holding, and retail access to leveraged products is restricted or prohibited in several jurisdictions. If you are buying spot, none of this applies to you and your cost is fees and spread, shown on the fee comparison. The exchange pages note where derivatives are offered.
Related terms
isolated margin — collateral walled off per position; maintenance margin — the level that triggers liquidation; liquidation — what happens at that level; margin — the borrowed exposure itself; leverage — the multiple being applied.
Questions
Which mode is safer?
Isolated margin caps the loss on any single position, which is the more predictable behavior. Cross margin gives positions more room and puts the whole account behind them, so it is safer per position and riskier per account.
Can I switch modes mid-position?
Some venues allow it and some do not. Where it is allowed, the liquidation price recalculates immediately, so check the new level before confirming rather than after.
Does cross margin apply to spot buying?
No. Buying an asset outright involves no borrowed exposure and no margin mode. These settings appear only on margin and derivatives products.