Cross Margin vs. Isolated Margin
Understanding margin modes is essential for futures trading risk management. Binance offers two modes: Cross Margin and Isolated Margin. Register for Binance to start futures trading, and download the APP for mobile access. Visit our guides for more futures tutorials.
Cross Margin
All available balance in your futures wallet is shared across all open positions.
How it works: If one position is losing, it draws margin from your entire futures wallet balance.
Pros:
- Lower liquidation risk for individual positions
- More flexible margin utilization
- Positions support each other
Cons:
- One bad trade can consume your entire futures balance
- Higher total risk exposure
- Harder to manage risk per position
Best for: Experienced traders running multiple correlated positions.
Isolated Margin
Each position has its own dedicated margin. Losses are limited to the margin assigned to that position.
How it works: You assign specific margin to each position. If liquidated, only that position's margin is lost.
Pros:
- Risk limited to assigned margin per position
- Easier to manage risk
- Other positions and wallet balance are protected
Cons:
- May get liquidated more easily (less margin buffer)
- Need to manually manage margin per position
- Cannot share excess margin between positions
Best for: Beginners and risk-conscious traders.
Comparison Table
| Feature | Cross Margin | Isolated Margin |
|---|---|---|
| Risk scope | Entire wallet | Per position only |
| Liquidation buffer | Higher | Lower |
| Max loss | Entire futures balance | Position margin only |
| Complexity | Simpler (auto) | Requires management |
| Recommended for | Experts | Beginners |
How to Switch Modes
- Open the futures trading page
- Find the "Cross" or "Isolated" toggle near the leverage selector
- Tap to switch
- Note: Cannot switch while a position is open in some cases
Practical Example
With $1,000 in your futures wallet:
Cross Margin: Open BTC long with $200 margin. If BTC drops, the remaining $800 automatically acts as additional buffer. But if the loss exceeds $1,000, your entire balance is gone.
Isolated Margin: Open BTC long with $200 isolated margin. If BTC drops enough, only the $200 is lost. Your remaining $800 is safe.
FAQ
Can I use different modes for different positions? Yes. On Binance, you can set cross or isolated independently for each trading pair.
Which mode do most traders use? Beginners typically use isolated. Professional traders often use cross for capital efficiency.
Can I add margin to an isolated position? Yes. You can manually add more margin to an isolated position to reduce liquidation risk.
Security Tips
- Beginners: always use isolated margin to limit potential losses
- Never risk more than you can afford to lose regardless of mode
- Monitor positions closely especially in cross margin mode
- Understand your liquidation price before entering any trade
- Set stop-losses regardless of margin mode