Differences Between Isolated Margin and Cross Margin

 Trading FAQs    |      2020-06-04
Binance now supports Cross Margin and Isolated Margin trading. You can easily select Cross or Isolated Mode in the trading page.
Margin in Isolated Margin mode is independent for each trading pair:
  • Each trading pair has an independent Isolated Margin Account. Only specific cryptocurrencies can be transferred in, held and borrowed in a specific Isolated Margin Account. For instance, in the BTCUSDT Isolated Margin Account, only BTC and USDT are accessible. You may open several Isolated Margin accounts for trading different pairs.
  • The position is independent for each trading pair. If adding margin is required, even if you have enough assets in other Isolated Margin Accounts or in the Cross Margin Account, the margin will not be added automatically, and you may have to replenish manually.
  • Margin level is calculated solely in each Isolated Margin Account based on the asset and debt in the isolated.
  • Risk is isolated in each Isolated Margin Account. Once liquidation happens, it will not affect other isolated positions.
For detailed rules about Isolated Margin trading, you may refer to Isolated Margin Trading Rules.
Margin in cross margin mode is shared among the user’s Margin Account:
  • Each user can only open one cross margin account, and all trading pairs are available in this account;
  • Assets in cross margin account are shared by all positions;
  • Margin level is calculated according to total asset value and debt in the Cross Margin Account.
  • The system will check the margin level of the Cross Margin Account and notify users about supplying additional margin or closing positions. Once liquidation happens, all positions will be liquidated.
For more detailed rules about Cross Margin trading, you may refer to Cross Margin Trading Rules.
For example:
On Day N, ETH market price is 200 USDT and BCH market price is 200 USDT. User A and User B transfer 400 USDT into Margin account respectively as margin balance, and purchase ETH and BCH with 5X leverage on average. User A traded in Cross Margin Account while User B traded in Isolated Margin accounts (trading fee and interest are not considered in this example).
Day N:
User A trades in Cross Margin mode:
  • Asset: 5 ETH, 5 BCH
  • Collateral：400 USDT
  • Margin level: (5 ETH*200+5 BCH*200)/1600 = 1.25
  • Status: normal
User B:
  • ETHUSDT Isolated Margin Account:
  • Asset：5 ETH
  • Collateral：200 USDT
  • Margin level：5 ETH * 200 /800= 1.25
  • Status: normal

  • BCHUSDT Isolated Margin Account:
  • Asset: 5 BCH
  • Collateral：200 USDT
  • Margin level: 5 BCH * 200 / 800 = 1.25
  • Status: normal

Day N+2: Supposing ETHUSDT price rises to 230 while BCHUSDT falls to 170.
User A in Cross Margin Account:
  • Asset: 5 ETH, 5 BCH
  • Margin level: (5 ETH*230+5 BCH*170)/1600 = 1.25
  • Status: normal
User B:
  • ETHUSDT Isolated Margin Account:
  • Asset：5 ETH
  • Margin level：5 ETH * 230 /800= 1.44
  • Status: normal with 150 USDT profit

  • BCHUSDT Isolated Margin Account:
  • Asset: 5 BCH
  • Margin level: 5 BCH * 170 / 800 = 1.06
  • Status: Margin call is triggered, the user will be notified to add more margin to the account
Day N+5: If the ETHUSDT price is down to 220 and the BCHUSDT price is dropped to 120, provided that both users choose not to add margins.
User A, Cross Margin Account:
  • Asset: 5 ETH, 5 BCH
  • Margin level: (5 ETH*220+5 BCH*120)/1600 = 1.06
  • Status: Margin call is triggered, user will be notified to add more margin to the account
User B:
  • ETHUSDT Isolated Margin Account:
  • Asset：5 ETH
  • Margin level：5 ETH * 220 /800= 1.38
  • Status: normal with 100 USDT profit

  • BCHUSDT Isolated Margin Account:
  • Asset: 0
  • Margin level: N/A
  • Status: margin level is 5 * 120 / 800 < 1，the position has been liquidated.