Guide for Newcomers in the Crypto World: Understanding Isolated Margin and Cross Margin Before Trading #币安HODLer空投NEWT #币安Alpha上新 #新手必看 #新手小白的合约之路
Isolated Margin and Cross Margin: Core Differences in Trading Margin Models
1.
Isolated Margin Model: Independent Risk 'Isolation Chamber' Locks a fixed amount as margin for opening positions, isolating it from other funds in the account, and calculating risk separately.
Features are as follows:
Long and short positions are calculated independently, without affecting each other;Liquidation only loses the margin of that position, keeping account funds safe;Suitable for short-term speculation, diversified holdings, and precise control of individual risks.Example: 1000U margin for opening a position, forced liquidation at most loses 1000U, remaining funds are unaffected.
2.
Cross Margin Model: Globally Linked 'Capital Pool' All funds in the account (balance + profit and loss) collectively serve as margin, with long and short positions merged for calculation. The advantages are:
High capital utilization, strong holding capacity;Shared risk, fluctuations in a single position can be hedged;Easy operation, suitable for quantitative trading and large capital allocation. Example: 2000U cross margin for opening a position, when the price drops, the balance is deducted first, liquidation occurs only when funds are zero.
3.
Isolated Margin VS Cross Margin: Core ComparisonComparison DimensionsIsolated Margin ModelCross Margin ModelMarginFixed for single positionAccount linkedRisk RangeSingle positionOverall riskLiquidation ConditionsSingle position losses exceed marginOverall losses exceed balanceApplicable ScenariosShort-term, diversified holdingsTrend trading, hedgingCapital Utilization RateLowHighOperational ComplexityComplexSimple4. Practical RecommendationsIsolated margin is suitable for beginners to experiment and for high volatility markets;Cross margin is suitable for hedging strategies and long-term trend trading. 5. Risk WarningIsolated margin is still prone to liquidation near strong liquidation prices or with high leverage; cross margin may instantly incur losses in extreme market conditions, and both require strict control of positions and leverage.
Summary: Isolated margin emphasizes separation, while cross margin emphasizes linkage; reasonable control of positions is the key.
