## When Should You Choose Cross or Isolated Mode in Futures Trading?

When starting futures trading, one of the most important decisions is choosing between **cross and isolated** modes. These two margin management methods operate completely differently, directly affecting your risk level and account control.

## Isolated Mode: Tight Risk Control

**Isolated (margin with separate margin)** assigns a fixed amount of margin to each independent position. This means you can adjust leverage and the margin amount individually for each position without affecting others.

The margin calculation formula for Isolated positions is straightforward:

**Margin = (Open Quantity × Entry Price) / Leverage**

For example: You open a long position of 0.1 BTC on the BTCUSDT pair at a price of 50,000 USDT with x25 leverage. The initial margin will be: 50,000 × 0.1 ÷ 25 = 200 USDT.

The benefit of this mode is **your maximum loss is limited to the margin assigned to that position**. If the position is liquidated due to price fluctuations, you will only lose this 200 USDT without affecting the remaining account balance. This is why Isolated mode is suitable for traders who want to **manage risk tightly for each position**.

## Cross Mode: Flexible but Higher Risk

**Cross (margin sharing)** uses the entire balance in your Futures account as margin for all open positions. Instead of allocating separately, positions share a single "margin pool."

The initial margin for each position is still calculated using the same formula:

**Initial Margin = (Open Quantity × Entry Price) / Leverage**

But the key difference is that **the actual margin used is the entire account balance**. If you have 1,000 USDT in your account and open a long position of 0.1 BTC at 50,000 USDT with x25 leverage (requiring 200 USDT), then the entire 1,000 USDT becomes a "buffer" for this position.

The advantage is that you can **maintain positions longer** because the entire account supports the position. However, the downside is that if total losses from all positions exceed the account balance, **the entire account will be liquidated**.

## Cross and Isolated Modes: How to Choose the Right One

The difference between **cross and isolated** modes is not just technical but also strategic:

- **Choose Isolated if** you want to control risk for each position, have a specific trading strategy, and want to limit maximum losses
- **Choose Cross if** you hold multiple positions simultaneously, want to use unrealized profits to support other positions, and seek greater flexibility

In two-way position modes, you need to set separate leverage for Long and Short. In one-way position mode, only one configuration is needed.

**Important note:** Cryptocurrency trading involves significant risk. Make sure you fully understand each margin mode before starting, and only trade with funds you can afford to lose.