What is Isolated Margin?

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Isolated Margin designates the margin balance designated for an individual position. The Isolated Margin mode empowers traders to manage risk on singular positions by restricting the margin allocated to each. The assigned margin balance for every position remains adjustable on an individual basis.

In the Isolated Margin mode, if a trader’s position is liquidated, solely the Isolated Margin balance is subject to liquidation, rather than the entire margin balance.

For instance, consider Alice entering a 10x leveraged long BTC position worth 1000 USD. While her margin balance is 2000 USD, she opts to risk only a portion for the specific position, setting Isolated Margin at 100 USD. Consequently, in case of liquidation, her loss won’t surpass 100 USD.

Adjustments to the Isolated Margin amount are possible for active positions. Should a position in Isolated Margin mode approach liquidation, bolstering the position’s margin can prevent liquidation.

However, modifying the margin mode for a position already opened isn’t feasible. It is strongly recommended to review margin mode settings before initiating a position. This approach enhances risk management and ensures optimal decision-making.

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