When trading on PXTrader 2.0, you can choose between two types of margin: Isolated and Cross. Each type serves a different purpose and offers different levels of control and risk management for your positions.
Understanding how they work can help you choose the most appropriate strategy for your trades.
What Is Cross Margin?
Cross Margin uses your entire account balance to maintain open positions. This provides more flexibility and automatic protection from liquidation.
The platform will automatically add available funds from your balance to support a losing position.
Profits from other trades (unrealized PNL) can also be used to help avoid liquidation.
Example: If you have $1,000 in your account and open a $60,000 Bitcoin position using 100x leverage, only a portion of your equity is used as initial margin. If the market moves against you, your remaining account balance is used automatically to keep the trade open, reducing the risk of liquidation—especially if the market turns in your favor later.
What Is Isolated Margin?
Isolated Margin. on the other hand, allows you to limit the amount of capital you put at risk on a single trade. Only the margin you allocate to that position (Margin Impact) will be used, and losses are contained within it.
If the market moves against your position, only the funds allocated as margin for that specific position are at risk.
Isolated margin is useful for limiting losses on individual trades, especially when using high leverage.
Example: Let’s say you open a trade with the total volume of 100$ with 100x leverage using isolated margin. A 1% move in the wrong direction would liquidate the position.
What Is the Margin Impact Formula?
The Margin Impact Formula helps traders estimate how much margin will be used when opening a position:
Margin Impact = Order Size / Leverage
Example: If you open a $10,000 position using 100x leverage:
Margin Impact = $10,000 / 100 = $100
This means $100 of your available margin will be used to open and maintain that position. The rest of your account balance remains available for other trades or as a buffer in Cross Margin mode.
Liquidation level in Cross and Isolated Margin
Liquidation occurs when your losses exceed the margin available to support your position.
Cross margin spreads risk but exposes more capital, while isolated margin limits risk to a single position.
To help protect your account from going into a negative balance, the platform will automatically close positions when your account no longer meets the required maintenance margin.
For each open position, the platform calculates:
Used Margin – the amount of margin required to open the position.
Maintenance Margin – equal to 40% of the Used Margin.
Liquidation occurs when your account equity falls to or below the required Maintenance Margin. This corresponds to a Margin Level of 40%:
Margin Level (%) = (Equity ÷ Used Margin) × 100
The way Maintenance Margin is calculated depends on whether you are using Cross Margin or Isolated Margin.
Example 1: Cross Margin
In Cross Margin mode, all open positions share the same account equity. The platform calculates the Used Margin and Maintenance Margin for each position and then sums them across the account.
Suppose you have $100 equity and open the following positions:
Position 1: Brent Crude Oil
Position value: $7,000 (100 barrels at $70)
Leverage: 1:100
Used Margin: $70
Maintenance Margin: $28 (40% of $70)
Position 2: NFLX
Position value: $4,000 (50 shares at $80)
Leverage: 1:200
Used Margin: $20
Maintenance Margin: $8 (40% of $20)
The platform combines the margin requirements of both positions:
Total Used Margin: $90 ($70 + $20)
Total Maintenance Margin: $36 ($28 + $8)
As long as your account equity remains above $36, both positions can stay open.
If your combined unrealized losses reduce your equity from $100 to $36, your Margin Level becomes:
($36 ÷ $90) × 100 = 40%
At this point, the liquidation threshold is reached and the platform will begin closing positions automatically.
In this example, the maximum combined loss your account can sustain before liquidation is:
$100 − $36 = $64
Example 2: Isolated Margin
In Isolated Margin mode, each position has its own margin allocation and is evaluated independently. Losses on one position do not affect the margin requirements of other positions.
Suppose you have $100 equity and open a single Brent Oil position:
Position size: 100 barrels
Brent price: $70 per barrel
Position value: $7,000
Leverage: 1:100
Used Margin: $70
Maintenance Margin: $28 (40% of $70)
Since this is the only open position, liquidation is based solely on this position's margin requirements.
As long as the position's equity remains above $28, it can stay open.
If the unrealized loss on the position reaches $42, the remaining equity allocated to the position becomes:
$70 − $42 = $28
The Margin Level is then:
($28 ÷ $70) × 100 = 40%
At this point, the liquidation threshold is reached and the Brent position will be closed automatically.
In this example, the position can sustain a maximum loss of $42, which is equal to the difference between the Used Margin ($70) and the Maintenance Margin ($28).
Isolated vs Cross Margin: Key Differences
Feature | Isolated Margin | Cross Margin |
Margin Source | Specific to each position | Shared across all positions |
Risk Control | High – loss limited to set margin | Lower – uses full account balance |
Suitable For | Precise risk management | Volatile markets and flexible trading |
Liquidation Protection | Limited | More resilient |
Conclusion
Choosing between Isolated and Cross Margin depends on your trading strategy and risk tolerance. While Isolated Margin provides more control per trade, Cross Margin offers greater protection and peace of mind, especially in the volatile crypto markets. PrimeXBT recommends using Cross Margin for a safer and more flexible trading experience.