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Cross margin
Cross margin is a setting on leveraged trading platforms where all open positions share one pool of collateral, the account's available balance. A loss on one position can be covered by free funds or gains elsewhere, but a large enough loss can drain the whole account.
What it means for you. Under cross margin, one position going badly wrong can liquidate everything, because the platform draws on your whole balance before closing it. It can keep a position open through a move that would close an isolated one, but the amount at risk is the full account, not one trade.
Source: Campbell, Hey, Moallemi and Nutz: Risk-Based Auto-Deleveraging (arXiv) · checked 4 October 2026
Isolated margin
Isolated margin is a setting on leveraged trading platforms where each position has its own separate pot of collateral. If that position is liquidated, you lose the margin assigned to it, but the rest of your account balance is not used to keep it open.
What it means for you. Isolated margin caps what one bad trade can take: the collateral you assigned to it. The flip side is that a small cushion means a smaller price move can liquidate the position, even while you have free funds elsewhere in the account. Check which mode a platform uses by default before you open a leveraged trade.
Sources: Campbell, Hey, Moallemi and Nutz: Risk-Based Auto-Deleveraging (arXiv), CFTC Glossary · checked 4 October 2026