Starting with Isolated Margin: A Guide to Choosing the Best Margin Mode for Yourself on UTA

Integrated Trading Account (UTA) allows you to choose from three margin modes based on your trading strategy. These are Isolated Margin, Cross Margin, and Portfolio Margin. Among these, Isolated Margin is a simpler option suitable for traders who prefer independent position management. This guide compares the features of these three margin modes and explains how to select the most suitable mode for your trading style.

Basic Overview of the Three Margin Modes You Should Know Before Using UTA

Margin modes in UTA are critical settings applied uniformly across your entire account. You cannot select different modes for individual trading pairs, so it’s important to carefully choose the mode that best fits your trading style.

Isolated Margin (IM) Mode manages the collateral for each position separately. Since a liquidation of one position does not affect others, risk management is straightforward, and profit and loss are independent per position. You can set different leverage levels for long and short positions, providing greater flexibility in your trading strategies.

The default setting, Cross Margin (CM), pools the collateral across all positions in the account. Surplus funds can be used as collateral for other positions, enabling more efficient asset utilization. It also allows offsetting unrealized profits and losses between derivative positions.

Portfolio Margin (PM) is an advanced option designed for professional traders. It requires a minimum net asset value of $1,000 USD. It calculates required margin based on the overall risk profile of the entire portfolio, allowing significant margin reduction if balanced hedge positions are held.

Features of Isolated Margin Mode and Ideal Use Cases

In Isolated Margin mode, each position functions as an independent trading unit. It is well-suited for traders who engage in both spot and derivatives trading simultaneously.

Supported trading products include spot, USDT perpetual, USDC futures, USDC perpetual, inverse perpetual, and inverse futures. No special requirements mean beginners can start using it immediately. Position modes available are one-way mode and hedge mode (USDT perpetual only).

A key feature of Isolated Margin is support for automatic collateral replenishment. If your trading account runs low on funds, the system automatically replenishes from your spot account, improving trading efficiency. However, note that this feature does not support spot margin trading.

Liquidation triggers are straightforward: when the mark price reaches the liquidation price, the position is immediately liquidated, enabling predictable risk management. The displayed liquidation price is the actual trigger price, allowing accurate risk calculations.

Understanding the Differences Between Cross Margin and Portfolio Margin

Cross Margin (CM) is the most widely used default setting. It shares collateral across all positions, enabling efficient management of multiple positions. It also allows utilizing unrealized profits from perpetual and futures contracts when opening new positions.

In Cross Margin mode, hedged positions (long and short) must use the same leverage. While it offers less flexibility than Isolated Margin, it supports spot margin trading and borrowing, enabling more complex trading strategies. However, automatic collateral replenishment is not supported.

Portfolio Margin (PM) is for advanced users. It maximizes margin efficiency by offsetting risks across multiple asset classes. It only supports one-way mode, not hedge mode, but if the overall portfolio is balanced, required margin can be significantly reduced.

Portfolio Margin employs multi-asset collateral, meaning, for example, holding BTC can be used as collateral valued in USD to trade USDT perpetual contracts, providing flexible asset utilization as its main advantage.

Checklist for Choosing the Most Suitable Margin Mode

Check the requirements for switching to Isolated Margin. To switch to Isolated Margin, you must have no open option orders or positions, no spot margin orders, and no borrowed funds. Additionally, you need sufficient assets to cover potential margin increases, and the mark price of existing positions must not fall below the new liquidation price after switching.

Once switched to Isolated Margin, spot margin trading and collateral switching features are disabled by default, and automatic collateral replenishment is also turned off. Be sure to understand these changes before proceeding.

Switching to Cross Margin is relatively simple. The only requirement is that your required margin ratio falls below 100%. When switching, spot margin trading is enabled by default, and for inverse contracts, each position’s collateral is automatically activated. If you had different leverage settings during IM, the system will automatically adjust them.

Switching to Portfolio Margin requires meeting stricter conditions: the required margin ratio must be below 100%, and there must be no open orders or positions in hedge mode. After switching, spot margin trading is enabled by default, and inverse contracts’ collateral is automatically activated.

Your choice of mode depends on your trading volume, risk tolerance, and position management complexity. If you prefer simple position management, choose Isolated Margin. For better capital efficiency across multiple positions, Cross Margin is suitable. For advanced risk offset strategies, Portfolio Margin is recommended.