Beginner Guide to Contracts Isolated Margin Versus Cross Margin Differences

OKX SupportOKX Support
3 min read

Understand Cross vs. Isolated Margin in Just 3 Minutes: What Happened to Your Funds?

Essential for newcomers! We'll clarify the key distinctions between these critical margin modes in straightforward terms. Mastering this could slash your losses by at least 30%!

1. Isolated Margin

Isolated Margin caters to adrenaline junkies — your margin acts like individual poker chips: you only forfeit what's staked on that specific hand.
You can hold long and short positions concurrently, with each trade operating independently.

  • Main Benefit: Liquidation affects only the margin for that single position, safeguarding your remaining funds.
  • Best For: Precision-focused short-term traders or seasoned players executing simultaneous hedges.

2. Cross Margin: Win Big or Lose It All

Cross Margin converts your total account balance into collateral — it's a high-stakes gamble where you either triumph or face ruin.
All positions merge into one calculation, boosting overall risk endurance.

  • Main Benefit: Reduced vulnerability to minor price fluctuations, ideal for handling substantial capital.
  • Best For: Long-term whales or professional traders employing hedging tactics.

A Real-World Case Study

Xiao Ming and Xiao Hong each initiate a $2,000 long position with 10x leverage:

  • Xiao Ming opts for Isolated Margin: liquidated at $8,000 — loses $1,000 but retains $1,000.
  • Xiao Hong chooses Cross Margin: liquidated at $7,000 — survives at $8,000 temporarily, but any further decline wipes out her entire account.

The core takeaway—
Cross Margin resembles betting all your chips on a single hand: massive wins or total devastation.
Isolated Margin spreads your wagers across multiple tables — lose one, and you keep playing elsewhere.

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OKX Support
OKX Support

🔹 Helping you trade smarter with OKX 🔹 Tips, support & updates for crypto lovers 🔹 Not official support – just passionate about blockchain & DeFi 📬 DM for quick guides & trading insights