The Difference Between Isolated Margin and Cross Margin
Content of this article：
How to switch between cross margin / isolated margin mode
There are two margin modes on XT: Isolated margin mode and Cross margin mode.
What is Isolated Margin mode?
The isolated margin mode depicts the margin placed into a position is isolated from the trader's account balance. This mode allows traders to manage their risks accordingly as the maximum amount a trader would lose from liquidation is limited to the position margin placed for that open position.
For example, a trader opens a 1500 BTCUSD position at $10,000 by using 1x leverage. The initial margin used to open the position is 0.15 BTC. Now, the trader changes the leverage to 3x. The initial margin required (collateral) will then change from 0.15 BTC to only 0.05 BTC. In the event of liquidation, the trader will only lose the 0.05 BTC initial margin (excluding fees). This allows the trader to limit their risk.
What is Cross Margin mode?
For example, a trader opens a BTCUSDT position. When the BTCUSDT position is liquidated, the trader will lose all of their USDT balance. The BTC balance will not be affected.
How to switch between cross margin / isolated margin mode?
Visit the contract trading screen and click on cross margin / isolated margin in the top right corner of the screen.
Are cross margin and isolated margin interchangeable when having an open position?
Traders can always change the margin mode from the order zone. When a margin mode is changed, it will be applied to the opened position and any active & conditional order. Any margin changes made will affect the liquidation price of the position. Hence, cross margin and isolated margin are interchangeable anytime whenever the account has a sufficient margin and the change itself doesn't trigger immediate liquidation.