You can trade in Isolated Margin and Cross Margin modes on Binance Margin. With the Isolated Margin mode, you can allocate a specific amount of margin to a single position to limit risks. In contrast, the Cross Margin mode uses the balance of your entire Margin Account as collateral, providing you with greater flexibility and lower margin requirements. You can trade with either one based on your risk tolerance and trading strategy.
What is the Isolated Margin mode?
Margin in the Isolated Margin mode is independent for each trading pair. You can open multiple Isolated Margin accounts for different trading pairs. Please note that you can only transfer, hold, and borrow the specified crypto to each Isolated Margin account. For example, you can only transfer and use BTC and USDT in the BTCUSDT Isolated Margin account.
Each trading pairās position is independent. If you need to add margin to a position, you must add it to the pairās respective Isolated Margin account. The system wonāt automatically use the margin in your other Isolated Margin accounts.
Margin level and risks are also independent for each Isolated Margin account. If liquidation happens to an Isolated Margin position, it wonāt affect your other Isolated Margin positions.
For more details about Isolated Margin trading, please refer to Binance Isolated Margin Trading Guide.
What is the Cross Margin mode?
Margin in the Cross Margin mode is shared among your Cross Margin positions. You can only open 1 Cross Margin account. Itāll allow you to access all the available trading pairs on Binance Margin.
Margin level is calculated according to the total asset value and debt in the Cross Margin account. The system will check the margin level of your Cross Margin account and notify you if you need to add more margin or close a position.
For more details about Cross Margin trading, please refer to Binance Cross Margin Trading Guide.
Example
On Day N, ETH is at 2,000 USDT and BCH is also at 2,000 USDT. User A and User B transferred 4,000 USDT into their Margin accounts respectively as margin, and purchased ETH and BCH with 3X leverage on average. User A traded in the Cross Margin mode while User B traded in the Isolated Margin mode. Please note that trading fees and interests are ignored in this example.
Day N:
User A traded in the Cross Margin mode:
- Asset: 3 ETH, 3 BCH
- Collateralļ¼4,000 USDT
- Margin level: (3 ETH * 2,000 + 3 BCH * 2,000) / 8,000 = 1.5
- Status: Normal
User B traded in the Isolated Margin mode:
ETHUSDT Isolated Margin account:
- Assetļ¼3 ETH
- Collateralļ¼2,000 USDT
- Margin levelļ¼3 ETH * 2,000 /4,000 = 1.5
- Status: Normal
BCHUSDT Isolated Margin account:
- Asset: 3 BCH
- Collateralļ¼2,000 USDT
- Margin level: 3 BCH * 2,000 /4,000 = 1.5
- Status: Normal
Day N+2: ETH rises to 2,300 USDT while BCH falls to 1,500 USDT.
User A (Cross Margin mode):
- Asset: 3 ETH, 3 BCH
- Margin level: (3 ETH * 2,300 + 3 BCH * 1,500) / 8,000 = 1.425
- Status: Normal
User B (Isolated Margin mode):
ETHUSDT Isolated Margin account:
- Assetļ¼3 ETH
- Margin levelļ¼3 ETH * 2,300 /4,000= 1.725
- Status: Normal with a 900 USDT profit
BCHUSDT Isolated Margin account:
- Asset: 3 BCH
- Margin level: 3 BCH * 1,500 / 4,000 = 1.125
- Status: Margin call is triggered, the system will notify User B to add more margin to the account
Day N+5: ETH is at 2,200 USDT and BCH is at 1,000 USDT. Both User A and B chose not to add margins.
User A (Cross Margin mode):
- Asset: 3 ETH, 3 BCH
- Margin level: (3 ETH * 2,200 + 3 BCH * 1,000) / 8,000 = 1.2
- Status: Margin call is triggered, the system will notify User A to add more margin to the account
User B (Isolated Margin mode):
ETHUSDT Isolated Margin Account:
- Assetļ¼3 ETH
- Margin levelļ¼3 ETH * 2,200 /4,000= 1.65
- Status: Normal with a 600 USDT profit
BCHUSDT Isolated Margin Account:
- Asset: 0
- Margin level: N/A
- Status: Margin level is 3 * 1,000 / 4,000 < 1, the position has been liquidated.