Full Position Meaning Analysis: Comparison between Full Position and Isolated Margin Modes

In leveraged trading, the choice of margin mode directly affects risk tolerance and capital utilization efficiency. Cross margin and isolated margin are two fundamentally different risk management methods, which beginners often confuse. The key to understanding cross margin is that it represents treating the entire account funds as a shared margin pool, while isolated margin allocates a fixed margin for each position separately.

Cross Margin Mode: Meaning and Operational Logic

The core idea of cross margin mode is: all available account balances can be shared among multiple positions. No matter how many positions you open within the same contract account, they can support each other.

In this mode:

• Users can set cross margin on multiple contract positions, all sharing a single margin pool
• The initial margin for cross margin is calculated as: position size × entry price ÷ leverage
• Actual position margin = total available funds in the account

For example: Suppose your contract account has 1,000 USDT available, and you buy a BTCUSDT contract of 0.1 BTC at a price of 50,000 USDT with 25x leverage. The initial margin for cross margin is: 50,000 × 0.1 ÷ 25 = 200 USDT. But the actual funds used as margin are the entire 1,000 USDT. This means the position can withstand losses up to 1,000 USDT before being forcibly liquidated.

Isolated Margin Mode: Fixed Risk Boundary

The main difference between isolated margin and cross margin is that, isolated margin sets a fixed, independent margin for each position.

Features of isolated margin include:

• Position margin is a fixed value, calculated as: position size × entry price ÷ leverage
• When the margin balance of a position falls below the maintenance margin, that position triggers a forced liquidation independently
• The maximum loss for a single position is clearly defined and does not affect other funds in the account

Using the same example: opening a 0.1 BTC position with 25x leverage, the isolated margin is fixed at 200 USDT. If that position loses more than 200 USDT, only this position will be liquidated, and other funds in the account remain intact.

Cross Margin vs Isolated Margin: Practical Application Comparison

It is worth noting that in cross margin mode, unrealized profits and losses from profitable positions cannot be used as collateral for other losing positions, which is often overlooked.

Hedging and Mode Selection

Whether choosing cross margin or isolated margin, in a hedging mode, you need to set leverage separately for long and short positions; in a single-direction mode, you can set it once. These are independent configuration dimensions from the margin mode.

Flexible Choice Based on Needs

Cross margin mode is suitable for traders with sufficient capital and strong risk judgment, as it maximizes capital utilization but requires more detailed position management. Isolated margin sets clear risk boundaries, with each position’s maximum loss clearly visible, making it easier for beginners to control risk. After understanding the core meaning of cross margin, you can choose based on your trading strategy and risk tolerance.

Important Risk Reminder: Leverage trading involves significant risks and may lead to the loss of all principal. Please conduct trading decisions cautiously after fully understanding the relevant mechanisms.