guide
Isolated vs Cross Margin: Collateral and Liquidation
Compare assigned and shared collateral, automatic margin additions, liquidation assumptions and risks across positions.
What the margin mode controls
A margin mode determines which eligible collateral supports a position and how margin requirements are assessed. Isolated margin assigns collateral to a position or defined group; cross margin shares an eligible pool across covered positions. Portfolio margin is a separate risk-based arrangement. Product and account rules determine the exact scope.
This guide concerns linear crypto derivatives. It does not describe every spot-borrowing or inverse-contract system. Margin is collateral, not a purchase price or a universal maximum loss. The account's transfer settings, fees, liabilities and applicable protections matter alongside the selected mode. Bybit describes one venue's account and position rules; it is not a promise of availability to every reader.
Both modes can expose funds to substantial losses. Check eligible collateral, automatic transfers, maintenance requirements and account protections. The numerical example is an educational approximation, not a live liquidation quote or a recommendation to trade.
Isolated margin
An isolated position is assessed against its assigned collateral. If its equity reaches the applicable maintenance threshold, it can be liquidated while another position remains open. That separation does not guarantee a loss limited to the original deposit.
Track every addition
Manual top-ups put more collateral behind the position. An enabled auto-replenishment feature may draw additional eligible funds from the account. Check the feature's limits and product support; the word isolated does not tell you whether it is enabled. Bybit documents this distinction.
Separate collateral from final loss
Fees, funding, settlement and liquidation procedures affect the result. A displayed liquidation price is an estimate under current inputs. A stop order is not a guaranteed fill, and using a mark price does not guarantee protection from exceptional price movements.
The amount initially assigned is only the starting collateral. Read transfer settings and contract terms before treating any amount as a loss boundary.
Cross margin
Cross margin shares eligible collateral across the positions covered by that account arrangement. Eligible collateral can be narrower than the assets visible in an account. Haircuts, unrealized results, orders, borrowing and other requirements can affect the available buffer.
One position affects the pool
A losing position can consume collateral supporting other positions. Unrealized gains may support the pool where the rules allow, but later losses can remove that support. The liquidation process may reduce or close several positions under the venue's account rules.
A hedge needs a defined exposure
A BTC long and an ETH short are not automatically neutral. Their sizes and relative price moves determine the combined result. Correlated prices can still diverge, and offsetting economic exposure does not guarantee that margin requirements or liquidation risk disappear.
Compare the collateral rules
| Question | Isolated | Cross |
|---|---|---|
| Collateral scope | Assigned to the position or defined group | Eligible pool shared by covered positions |
| Additional funding | Manual or enabled automatic additions can increase exposure | Changes in the shared pool affect support |
| Loss boundary | Depends on additions, costs and account protections | Depends on eligible collateral, obligations and protections |
| Liquidation distance | Depends on the position's actual support and requirements | Can change as other positions and collateral change |
| Effect of other positions | Usually separated within the defined isolated arrangement | Gains, losses and requirements can affect the shared pool |
| Capital use | Collateral can remain tied to one position | Collateral can support multiple covered positions |
| Mode switching | Depends on product, account and open-position restrictions | Check account-wide versus per-position settings |
| Suitable choice | Requires understanding the actual loss and transfer rules | Requires monitoring the combined account exposure |
One explicitly simplified example
Every amount uses the same hypothetical quote-currency units. Hold the position size constant: one linear unit entered at 100, with initial assigned margin 20. For this illustration only, maintenance is fixed at 1, equal to 1% of ENTRY notional throughout. No fees, funding, tier changes, collateral-value changes, other positions or orders are included. Real venues can recalculate maintenance from mark notional and apply additional rules. These numbers come from the site's explicitly simplified calculator model.
Assigned collateral
With 20 of collateral and no additions, remaining equity is collateral plus the position's unrealized result. It reaches the fixed maintenance amount at price 81; zero equity would occur at 80. The maintenance threshold and zero equity are different points.
Shared collateral, one position only
Keep the same position but let a shared pool of 50 support it, including the original assigned margin. Under these same fixed-maintenance assumptions, the threshold becomes 51 and zero equity is 50. This comparison changes collateral, not position size. Add another position, costs or different maintenance rules and these thresholds no longer apply.
Checks before selecting a mode
Inspect the account rules
Identify the contract type, eligible collateral, margin scope, transfer settings, maintenance tiers and liquidation process. Check whether changing the mode is possible with open positions or orders. Margin mode and one-way versus hedge position mode are different settings.
Inspect the combined risk
Review each position's size, collateral and costs, then test adverse moves across the whole account. Recheck after adding positions or collateral. Neither a beginner label nor a professional preference establishes that a mode is appropriate or safe for a particular person.
Benefits and limitations
Source rules checked on 2026-09-11. Product settings and requirements can change. Use the venue's current documentation and account information before relying on a displayed margin estimate.
| Mode | Possible benefit | Limitation |
|---|---|---|
| Isolated | Makes assigned collateral and position-level monitoring easier to separate | Extra transfers and costs can enlarge exposure; funds tied to another position may not support this one |
| Cross | Allows eligible collateral to support several covered positions | A changing shared pool links their margin risk and requires account-wide monitoring |
Frequently Asked Questions
What is the main difference between isolated and cross margin?
Is my original isolated margin always the most I can lose?
Does cross margin use every asset in my account?
Does cross margin always move liquidation further away?
Can I change margin mode while a position is open?
Are fees and funding determined by margin mode?
Is isolated or cross margin safer?
Derivatives & Leveraged Products — Important Risk Warning
Derivatives and leveraged products are complex and carry a high risk of rapid, substantial losses. Depending on the product and account rules, losses can exceed the initial margin or money committed. A stand-alone purchased option can lose its entire premium plus transaction costs; writing options, exercising into another position, or combining positions can create additional obligations. An uncovered call writer can face unlimited loss. Applicable legal protections can affect the loss boundary.
You should carefully consider whether you understand how derivatives work and whether you can afford to take the high risk of losing your money. This content is for educational purposes only and does not constitute financial advice, investment advice, or a recommendation to trade derivatives.
Legal availability and regulatory protections depend on the product, service, provider and jurisdiction. In the EU, check the applicable investment-services rules, including MiFID II where relevant, and any product restrictions. Before trading, verify with the relevant regulator whether the provider has the permissions required for the service and whether the product may be offered to you. A website being accessible, or a product appearing on this website, does not establish authorization or eligibility.
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