# What Is the Difference between a 'Cross Margin' and an 'Isolated Margin' Account? ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

---

## What Is the Difference between a ‘Cross Margin’ and an ‘Isolated Margin’ Account?

In an isolated margin account, the margin allocated to a specific position is separate from the rest of the account balance. If the position is liquidated, only that margin is lost.

In a cross margin account, the entire account balance is used as collateral for all open positions. This reduces the chance of liquidation for a single position but risks the entire account balance if multiple positions move adversely.

- [How Is Value at Risk (VaR) Used in Setting Position Limits?](https://learn.greeks.live/path/how-is-value-at-risk-var-used-in-setting-position-limits/)

- [Does the Liquidation Process Differ between a Cross-Margin and an Isolated-Margin Position?](https://learn.greeks.live/path/does-the-liquidation-process-differ-between-a-cross-margin-and-an-isolated-margin-position/)

- [How Does “Cross-Margin” Differ from “Isolated Margin” in a CEX?](https://learn.greeks.live/path/how-does-cross-margin-differ-from-isolated-margin-in-a-cex/)

- [What Is Cross-Margin versus Isolated-Margin in a DeFi Derivatives Protocol?](https://learn.greeks.live/path/what-is-cross-margin-versus-isolated-margin-in-a-defi-derivatives-protocol/)

- [What Is the Concept of ‘Cross-Margin’ versus ‘Isolated Margin’?](https://learn.greeks.live/path/what-is-the-concept-of-cross-margin-versus-isolated-margin/)

- [What Is the Concept of “Cross-Margin” in Crypto Derivatives Trading?](https://learn.greeks.live/path/what-is-the-concept-of-cross-margin-in-crypto-derivatives-trading/)

- [What Is Cross-Margin in the Context of Crypto Derivatives Exchanges?](https://learn.greeks.live/path/what-is-cross-margin-in-the-context-of-crypto-derivatives-exchanges/)

- [What Is a ‘Cross-Margin’ versus an ‘Isolated Margin’ Account?](https://learn.greeks.live/path/what-is-a-cross-margin-versus-an-isolated-margin-account/)

## Glossar

### [Account Balance](https://learn.greeks.live/area/account-balance/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Valuation ⎊ Account balance, within cryptocurrency, options, and derivatives, represents the net liquid value accessible to a participant, factoring in realized and unrealized profit and loss across open positions and collateral held.

### [Isolated Margin](https://learn.greeks.live/area/isolated-margin/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Leverage ⎊ Isolated margin represents a risk management protocol within cryptocurrency derivatives exchanges, enabling traders to allocate specific capital for margin requirements on a per-contract basis.

### [Isolated Margin Account](https://learn.greeks.live/area/isolated-margin-account/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Risk ⎊ Isolated Margin Accounts represent a segregated funding pool within a derivatives exchange, specifically allocated to positions in perpetual swaps or futures contracts; this compartmentalization limits potential losses to only the funds within that isolated account, preventing liquidation cascades across a trader’s broader portfolio.

### [Entire Account Balance](https://learn.greeks.live/area/entire-account-balance/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Valuation ⎊ The Entire Account Balance, within cryptocurrency, options, and derivatives, represents the aggregate net equity held by a participant across all positions and cash holdings, reflecting real-time market valuations and accrued fees.

## Discover More

### [How Does a Margin Model Account for the Jump Risk Inherent in Cryptocurrency Markets?](https://learn.greeks.live/path/how-does-a-margin-model-account-for-the-jump-risk-inherent-in-cryptocurrency-markets/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Margin Model Account for the Jump Risk Inherent in Cryptocurrency Markets?](https://learn.greeks.live/wp-content/uploads/2025/10/Asymmetric-Glass-Abstraction-Modeling-Liquidity-Provision-in-Decentralized-Exchange-Order-Books.webp)

Margin models use extreme stress scenarios and historical 'fat-tail' data, or add a specific 'jump' parameter, to cover sudden, large price moves.

### [What Is the Difference between Cross-Margin and Isolated-Margin Liquidation?](https://learn.greeks.live/path/what-is-the-difference-between-cross-margin-and-isolated-margin-liquidation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between Cross-Margin and Isolated-Margin Liquidation?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Visualization-of-Collateralized-Cross-Asset-Hedging-Mechanisms-in-Decentralized-Finance.webp)

Isolated margin limits risk to one position's collateral; cross margin risks the entire account balance for all positions.

### [What Is "Cross-Margin" versus "Isolated Margin" in Derivatives Trading?](https://learn.greeks.live/path/what-is-cross-margin-versus-isolated-margin-in-derivatives-trading/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is "Cross-Margin" versus "Isolated Margin" in Derivatives Trading?](https://learn.greeks.live/wp-content/uploads/2025/10/Visualizing-Arbitrage-Equilibrium-Between-Layer-One-Blockchain-Volatility-And-Exotic-Option-Hedging-Strategies.webp)

Isolated margin is position-specific collateral; cross-margin uses the entire account balance as shared collateral for all open positions.

### [What Is 'Cross Margin' versus 'Isolated Margin' in Relation to Margin Calls?](https://learn.greeks.live/path/what-is-cross-margin-versus-isolated-margin-in-relation-to-margin-calls/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is 'Cross Margin' versus 'Isolated Margin' in Relation to Margin Calls?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Representation-of-On-Chain-Liquidity-Pool-Mechanisms-Supporting-Decentralized-Exchange-Settlement-Layers.webp)

Isolated margin limits risk to a single position's collateral; cross margin uses the entire account balance as collateral for all positions.

### [How Does "Cross-Margin" Differ from "Isolated Margin" in a CEX?](https://learn.greeks.live/path/how-does-cross-margin-differ-from-isolated-margin-in-a-cex/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does "Cross-Margin" Differ from "Isolated Margin" in a CEX?](https://learn.greeks.live/wp-content/uploads/2025/10/Exposing-Internal-Architecture-of-Binary-Options-Settlement-Mechanism-Symmetric-Cryptographic-Primitives.webp)

Isolated margin limits collateral to a single position; cross-margin uses the entire account balance as collateral for all positions, increasing risk exposure.

### [How Does the Model Account for the Intrinsic Value of an Option?](https://learn.greeks.live/path/how-does-the-model-account-for-the-intrinsic-value-of-an-option/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Model Account for the Intrinsic Value of an Option?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Representation-of-Decentralized-Finance-Derivative-Hedging-Mechanisms-and-Volatility-Surface-Dynamics.webp)

Black-Scholes uses the underlying and strike prices to determine intrinsic value, then adds the calculated time value.

### [How Could a Derivatives Exchange Use ZKPs to Verify a Trader Has Sufficient Margin without Knowing Their Total Account Value?](https://learn.greeks.live/path/how-could-a-derivatives-exchange-use-zkps-to-verify-a-trader-has-sufficient-margin-without-knowing-their-total-account-value/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Could a Derivatives Exchange Use ZKPs to Verify a Trader Has Sufficient Margin without Knowing Their Total Account Value?](https://learn.greeks.live/wp-content/uploads/2025/10/Layered-Digital-Asset-Futures-Contracts-Structure-Revealing-Underlying-Blockchain-Consensus-Mechanisms.webp)

A trader can generate a ZKP to prove their account value exceeds the margin requirement, without revealing the actual balance.

### [How Is the "Greeks" (Delta, Gamma, Theta, Vega) Calculation for Bitcoin Options Adjusted to Account for the Possibility of a 51% Attack?](https://learn.greeks.live/path/how-is-the-greeks-delta-gamma-theta-vega-calculation-for-bitcoin-options-adjusted-to-account-for-the-possibility-of-a-51-attack/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Is the "Greeks" (Delta, Gamma, Theta, Vega) Calculation for Bitcoin Options Adjusted to Account for the Possibility of a 51% Attack?](https://learn.greeks.live/wp-content/uploads/2025/10/Illuminated-Green-Toroidal-Structure-Symbolizing-Crypto-Volatility-and-Option-Hedging-Mechanisms.webp)

The risk of a 51% attack is not a direct input; it is priced into the implied volatility, which in turn affects all the Greeks.

### [How Does a Liquidation under Cross Margin Affect the Initial Margin of Other Positions?](https://learn.greeks.live/path/how-does-a-liquidation-under-cross-margin-affect-the-initial-margin-of-other-positions/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Liquidation under Cross Margin Affect the Initial Margin of Other Positions?](https://learn.greeks.live/wp-content/uploads/2025/10/Teal-Oblate-Spheroid-Interfacing-Complex-Black-Blade-Analogous-to-DeFi-Rebalancing-Mechanism.webp)

It reduces the shared margin pool, which lowers the available margin for all other open positions, increasing their risk of liquidation.

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