Cross-margin and other modes: how to choose the best option for your trading

Single Trading Account (STA) allows you to operate with three different margin modes, each designed for specific purposes. Cross margin is set as the default and is the most common choice for most traders, but isolated margin and portfolio margin are also available. Choosing the right mode directly impacts your trading strategy, risk management, and profit opportunities.

It is important to remember that the selected margin mode applies to your entire account immediately—you cannot apply different modes to individual trading pairs. This means that before switching, you should carefully consider which option best suits your trading needs.

The Three Main Margin Modes in a Single Account

Each of the three margin modes has unique characteristics and is intended for different categories of traders.

Isolated Margin is designed for traders who prefer to manage the risk of each position separately. In this mode, margin is calculated individually for each position, allowing different leverage for long and short positions on the same pair. It supports spot trading, perpetual contracts on USDT and USDC, futures, and inverse contracts. Automatic margin replenishment triggers when approaching liquidation. Liquidation occurs when the mark price reaches the set liquidation price for that specific position.

Cross Margin is the default mode, most often chosen by traders. When using cross margin, unused margin from one position can be used for another, providing more flexible capital management. This mode supports the full range of products: spot, spot margin trading, perpetual and futures contracts on USDT and USDC, USDC options, and inverse contracts. Traders can offset losses in one position with profits from another, making this mode useful for hedging strategies. Liquidation occurs when the account’s maintenance margin level reaches 100%.

Portfolio Margin is designed for professional traders with at least $1,000 USD in their account. Margin calculation is based on the risk of the entire portfolio, which allows reducing the required margin through well-balanced hedged positions. Besides spot trading and primary derivatives, portfolio margin also supports USDC options. Unlike the previous modes, it features a unidirectional position mode without the option to use a hedging mode.

How Cross Margin Differs from Isolated and Portfolio Margin

Comparing the three modes reveals significant differences in capital management and margin calculation.

Asset Mode: Isolated margin operates on a single-asset rule—USDT can only be used for trading USDT contracts, and USDC only for USDC. In contrast, cross and portfolio margin modes allow multi-asset usage. For example, if you hold BTC, you can use it as collateral, and the equivalent USDT value can be used to trade USDT perpetual contracts.

Leverage Settings: In isolated margin, you can set different leverage for long and short positions on the same pair. In hedge mode (available only for USDT), long and short positions must use the same leverage. Cross and portfolio margin modes do not allow such flexibility at the individual position level.

Margin Rates: Isolated margin does not apply account-level margin rates. Cross and portfolio margin require control over the initial margin rate and maintenance margin at the entire account level.

Spot Margin Trading: Isolated margin does not support spot margin trading. Cross and portfolio margin modes have this feature enabled by default, allowing borrowing assets for spot trading.

P&L Compensation: In isolated margin, profits and losses of one position do not affect others. Cross and portfolio margin modes allow P&L offset between positions, using unrealized profits from contracts to open new positions.

Automatic Margin Replenishment: Only isolated margin supports this feature; cross and portfolio margin modes do not.

Liquidation and Triggers: In isolated margin, liquidation depends on the specific mark price for each position. In cross and portfolio margin modes, liquidation occurs when the account’s MM% (maintenance margin level) reaches 100%. This means that the liquidation price indicator for cross margin is only an approximate reference, as the actual trigger depends on the overall portfolio status.

Conditions for Switching Between Modes

Transitions between margin modes are possible but require meeting certain conditions.

Switching to Isolated Margin: To successfully switch from cross or portfolio margin to isolated margin, you must:

• Close or cancel all options orders and positions
• Have no active spot margin orders
• Ensure sufficient assets to cover increased margin requirements
• Have no existing loans
• Disable spot margin trading
• Ensure that the mark price of current positions is not worse than the liquidation price after switching to isolated margin
• Have enough assets allocated to each position without risking liquidation

After a successful switch to isolated margin, spot margin trading will automatically be disabled, automatic margin replenishment will be deactivated by default, and the collateral switch will be set to “off.”

Switching to Cross Margin: Switching from isolated or portfolio margin to cross margin is simpler. The main condition is that the initial margin level must not exceed 100% after the switch. Upon successful transition:

• Spot margin trading will be enabled by default
• If there were positions in inverse contracts, the corresponding collateral assets will be activated as collateral
• If different leverage levels were used for long and short positions in isolated margin, the system will align them to the lower leverage
• Positions at different risk levels will be transferred to leverage corresponding to the higher risk limit

Switching to Portfolio Margin: Transitioning from isolated or cross margin to portfolio margin is possible if:

• The initial margin level does not exceed 100% after switching
• In hedge mode, there are no active orders or positions

After a successful switch to portfolio margin, spot margin trading will be enabled by default, and inverse contracts will be properly activated.

Practical Recommendations for Traders: Choosing the Right Mode

The choice of mode depends on your trading strategy and experience.

Isolated Margin is best suited for conservative traders who want full control over the risk of each position individually. It is a safer option for learning and experimentation, as the risk of one position does not affect others.

Cross Margin is the optimal choice for most active traders. It offers a balance between flexibility and control, allowing more efficient capital use through margin sharing across positions. Cross margin is especially useful when employing hedging strategies, where profits from one position can offset losses in another. This flexibility makes it popular among professionals who understand portfolio management.

Portfolio Margin is designed for experienced traders with a minimum capital of $1,000 USD. It is most effective when working with a diversified portfolio, where well-hedged positions can significantly reduce the required margin.

Before switching, carefully verify all conditions and ensure your account complies. An incorrect choice of mode may limit your trading capabilities or expose you to unforeseen risks.