Today I will show you the main differences between Binance isolated margin and cross margin, which one is better, which one you should choose and how to trade.
What is isolated margin ?
Isolated margin is a type of margin where you only risk the funds you have allocated at the opening of your transaction in your leveraged trading position .In case of a possible liquidation, you will not lose your entire balance, but only the amount you have allocated for that position.
How to buy and sell on isolated margin ?
In Binance futures , there is a margin selection just to the left of the leverage option. Click on the section that says Isoleted in this section. To use isolated margin , you need to exit multi-asset mode and switch to single-asset mode. Then you can open a position with the isolated margin option.
In the example position in the picture, in case of liquidation, we would lose the $89.76 written in the margin section. Nothing would happen to the rest of our balance. You can add or remove margin, by clicking on the pencil mark next to the isolated text.
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What is cross margin ?
Cross margin is a type of margin in which you provide your entire balance as collateral in buy-sell position. In the event of a possible liquidation, if you are trading Binance futures, you will lose all your money in this section. Your spot balance and other balances will not be affected by this situation.
How to buy and sell on cross margin ?
In Binance futures, click on the cross margin option from the section just to the left of the leverage setting . You can use cross margin in single-asset or multi-asset mode.
In the position you see in the picture, in case of a possible liquidation, we will lose not only the 67.53 USDT shown in the margin section, but our entire futures balance.
What are the differences between isolated margin and cross margin ?
Cross margin uses your entire balance for your open positions.Isolated margin uses the balance determined and allocated for each position.
While the cross margin liquidation level is higher. It may be closer to the isolated margin.
Isolated margin is more flexible. You can add or remove money from isolated margin. Cross margin uses your entire balance .
Which is better: isolated margin or cross margin ?
For beginners and those who do not like risk, isolated margin is better, for experienced and risk-loving people, cross margin is better.
Should I choose isolated margin or cross margin?
You can choose according to your trading experience and risk level. Generally, more experienced people choose cross margin while beginners choose isolated margin.
If this article was helpful, don't forget to write '' turkey20 '' in the reference section when opening your Binance futures account. This will give you a 10% commission discount.
See you in our next article, good luck ...