Cross Margin Mode and Isolated Margin Mode

Hotcoin perpetual futures support two margin modes: Cross Margin Mode and Isolated Margin Mode. Each mode handles margin allocation, risk sharing, and position management differently.

1. What Is Cross Margin Mode?

In Cross Margin Mode, all positions share the available margin in the futures account. When a position approaches liquidation, the system automatically uses the available balance in the futures account to help reduce liquidation risk. As a result, losses from one position may affect other positions in the account.

Cross Margin Mode is generally more suitable for arbitrage and hedging strategies, multi-position management, or trading strategies that require higher capital efficiency.

In Isolated Margin Mode, margin is calculated separately for each position. The available balance in the futures account will not be automatically added to a position’s margin. The maximum loss on a position is limited to the margin allocated to that position, and the liquidation of one position generally does not directly affect other positions. Users can manually add margin or enable the Auto Add Margin feature. Adding margin can reduce effective leverage and help lower liquidation risk.  

Isolated Margin Mode is generally more suitable for high-leverage short-term trading, independent risk management, or strategies designed to limit the maximum loss of a single trade.

3. Rules for Switching Margin Modes

Cross Margin Mode and Isolated Margin Mode can be configured separately for different contracts. For example:

• BTC/USDT can use Cross Margin Mode

• ETH/USDT can use Isolated Margin Mode

Simply put, Cross Margin Mode allows positions to share account margin and risk, while Isolated Margin Mode isolates risk at the position level. Choose the margin mode that best fits your trading strategy, position management needs, and risk tolerance.