What Is the Main Benefit of Using Isolated Margin?
The main benefit of using isolated margin is risk containment. It limits the potential loss on a single position to the margin specifically allocated to it.
If the position is liquidated, only the isolated margin is lost, and the rest of the account's balance remains unaffected, providing better control over capital and risk exposure.
Glossar
Isolated Margin Position
Position ⎊ An Isolated Margin Position is a leveraged trade where a specific, fixed amount of collateral is explicitly allocated to support only that single contract.
Using Isolated Margin
Strategy ⎊ Using Isolated Margin is a deliberate risk management strategy where a trader explicitly designates a specific, finite amount of capital as collateral for an individual leveraged position.
Isolated Margin
Segregation ⎊ Isolated Margin is an account setting where the margin allocated to a specific derivative position is strictly segregated from the collateral supporting other positions, preventing losses in one trade from impacting the maintenance margin of another.