1. Isolated Margin+: Independent Margin Model
In isolated margin, the margin for each trade is calculated independently. For example, when you open isolated margin, only the margin used for that trade is at risk. If the market continuously leads to liquidation, it will only affect the funds of that particular trade, meaning other funds will not be impacted.
For example, if the account has 10,000 USDT and uses 2,000 USDT to open isolated margin, in the event of liquidation, the final loss will be 2,000 USDT, leaving 8,000 USDT safe and sound.
2. Cross Margin+: Shared Margin Model
Cross margin shares all balances in the account as a shared margin. If you open multiple cross margins, they will share the same pool of margin. If the market moves in your favor, it can lead to higher returns, but if the market moves against you, it may impact the margin of the entire account.
For example, if the account has 10,000 USDT and opens three cross margins, each with the full margin, if any one approaches liquidation, it will affect the margin of the entire account, potentially leading to a total liquidation of the account.
3. Risk Control+: Reasonable Capital Allocation
After understanding the difference between isolated margin and cross margin, novice investors need to be more disciplined. It is recommended to fully understand the spot market before attempting to trade. During operations, strict capital control allocation should be enforced to avoid over-trading and ensure that risks are manageable.
