Before you open a position, there’s always an Isolated / Cross option on the contract page. It doesn’t affect whether you’re going long or short, but it determines how much you could lose if your judgment is wrong.

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— Isolated margin: risk stays within one position —

In isolated margin mode, each position uses only the margin allocated to it. If the price moves against you and reaches the liquidation price, only that position is liquidated, and you can lose at most the margin allocated to it.

If you think the liquidation price is too close, you can manually add margin to move it farther away. Conversely, you can also withdraw any excess margin.

— Isolated margin: each position stands on its own —

In isolated margin mode, only the margin allocated to a position backs that position. For positions of the same size, the liquidation price is usually closer to the current price than it would be in cross margin, so there’s less room to ride out volatility.

The trade-off is that if the position is liquidated, you could lose most or even all of the margin allocated to it. Losses on multiple isolated positions don’t affect each other.

— Cross margin: your entire balance backs your positions —

In cross margin mode, the entire balance of the same margin asset in your Futures account backs your cross-margin positions. For positions of the same size, the liquidation price is usually farther from the current price, which can make them seem better able to withstand volatility.

The trade-off is that if you are liquidated, you could lose most or even all of that balance in your account. And when several cross-margin positions are losing at the same time, they can draw on the same margin.

— Which one should you choose? —

Neither mode is inherently safer. Isolated margin gives you a clear limit on potential losses, making it suitable if you want to assess the risk of each trade separately. Cross margin gives your positions more room to withstand volatility, but you need to plan your overall account exposure carefully.

If you’re new to futures, using isolated margin with low leverage and small positions makes it easier to keep losses within a manageable range when your prediction is wrong.

— A few easy-to-miss details —

On Binance USDⓈ-M futures, you can’t switch margin modes for a trading pair if you have an open position or an unfilled order, so choose your mode before opening a position.

If you use cross margin, don’t transfer all your funds into your Futures account. Transfer only the amount you plan to trade with—this effectively puts a cap on your cross-margin exposure too.