What Is a ‘Cross-Margin’ versus an ‘Isolated Margin’ Account?
In an isolated margin account, the margin assigned to a specific position is restricted to that position only. If the position is liquidated, only the margin for that trade is lost.
In a cross-margin account, the entire available balance in the trading account is used as collateral for all open positions. This spreads the risk but also means that a single losing position can deplete the entire account balance, increasing the overall risk of liquidation.
