What is Margin Mode?
Margin Mode is a setting that determines how you want to manage margin on your futures trades and is divided into two main categories based on your risk appetite and how you want to utilize your assets.
1. Isolated Margin
Isolated margin is set for each position. When the margin ratio of a position reaches 100%, it is liquidated.
• Losses in one position do not affect other assets or positions.
• This makes it easier to manage risk, but keep in mind that the risk of liquidation may be higher.
• Traders can increase or decrease the margin on each position.
💡 Example of using isolated margin
Open a long BTC/USDT position in Isolated Margin mode with a margin of 50 USDT → in a typical case, the maximum loss would be 50 USDT, which is the margin
2. Cross Margin
Use your entire account balance (futures account) as margin
• Even if one position is losing money, you don't have to pay additional margin if the other position is profitable.
• However, it is important to note that a loss on one position can lead to the liquidation of another position.
💡 Example of using cross margin
If you lose a BTCUSDT position, use other assets in your account (e.g., ETH position or remaining balance) to cover the loss.
⚠️ Please be aware that you cannot switch your margin mode if you have open orders or positions.
|