What Is the Distinction between Isolated Margin and Cross Margin?
Isolated margin dedicates a specific, limited amount of funds to a single position. If the position is liquidated, only that isolated margin is lost.
Cross margin, however, uses the entire available balance in the trading account as collateral for all open positions. This allows positions to withstand larger losses but carries the risk of liquidating the entire account balance if losses are severe.
Glossar
Isolated Margin
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.
Cross Margin
Leverage ⎊ Cross margin, within cryptocurrency derivatives and options trading, fundamentally involves utilizing a single margin pool to collateralize positions across multiple instruments.