Cross and Isolated Margin
Cross margin · Isolated margin · Margin mode · Cross mode · Isolated mode
Two ways to back a futures position: isolated margin uses only the margin put into that position, cross margin the whole futures wallet balance.
Simple explanation
Background: Korea's won exchanges offer spot trading only, so margin modes are something Korean traders meet on overseas futures platforms. In Korean they are called 교차 마진 (cross) and 격리 마진 (isolated).
When you open a futures position you pick a margin mode along with the leverage. Isolated margin ring-fences collateral for each position: only the margin you assigned to it absorbs losses, and if those losses grow too large only that position is liquidated, leaving the rest of your futures wallet untouched. Cross margin lets all positions share the whole futures wallet balance as collateral. Because the whole balance soaks up one position's losses, liquidation comes later, but when it comes it can take the entire balance. Binance Academy puts it the same way: an isolated liquidation loses only the margin assigned to that trade, while a cross liquidation can draw on the full account balance.
Binance's USDT-margined futures (USDⓈ-M) have set rules. Every contract starts in cross margin mode. The mode is chosen contract by contract, and it cannot be changed while that contract has an open position or an open order. In cross mode, a balance in one asset is shared by all contracts margined in that asset; a USDT balance, for example, backs all the USDT-margined contracts together. Other exchanges' details differ.
In isolated mode the liquidation price is set by the margin and the position size, and it barely moves unless you act (fees and funding nudge it a little). Adding margin pushes the liquidation price away; taking margin out pulls it closer. The cap on what you can lose is clear, so positions are easy to manage one by one. On the other hand, a position is liquidated once its own margin runs out even if the wallet still holds plenty. "I had money in my wallet and still got liquidated" is usually an isolated-margin story.
In cross mode the liquidation price keeps moving. Profits on other positions add collateral and push it away; losses pull it closer; deposits and withdrawals shift it too. Positions that move in opposite directions cushion each other, with one side's gain covering the other's loss. But one badly losing position drains the balance and can drag healthy positions into liquidation with it. Everything sits in one basket.
The leverage on screen can mislead. Set 10x in cross mode with a large wallet balance and you can still be far from liquidation; the real measure is position size ÷ the money actually backing it (your effective leverage). In isolated mode, the leverage you set is close to the position's real leverage. So neither mode is simply "safer": for the same position, cross delays liquidation but can lose much more at once, while isolated liquidates sooner but caps the loss.
Korea's won exchanges (Upbit, Bithumb, Coinone and Digital X, formerly Korbit) have no futures and no margin modes; spot trading there uses only your own money, so there is nothing to liquidate. Margin modes belong to overseas futures. Overseas exchanges may not serve Korean users without registering with Korea's Financial Intelligence Unit, and money held with them sits outside Korea's user-protection rules.
Margin modes decide how long a kimchi premium hedge survives. Traders who short overseas futures to cover price risk while coins travel to Korea face a split: if the price rises, the coins bound for Korea gain value, but that gain is in transit or on the Korean exchange while the short's loss lands in the overseas futures wallet. Gains and losses in different places cannot offset each other, so a short in isolated mode with thin margin can be liquidated first, breaking the hedge. In cross mode the whole futures balance stands behind the short, but the whole balance is then tied to the risk of that short and every other position. CoinGaja does not show margin modes or liquidation prices, but its Kimchi Premium Calculator and Live Tether premium page show the spot-side costs and the price of dollars (Tether) in Korea.
Example
Futures wallet balance $5,000 (about ₩7,000,000); a 0.1 BTC long at $100,000 (a $10,000 position) at 10x, assumed maintenance rate 0.5%
Isolated: margin $1,000 → liquidated when the loss reaches 1,000 − 50 = $950 → liquidation price about $90,500 (-9.5%); the most you lose is $1,000, and the other $4,000 is untouched
Cross: the whole $5,000 backs it → liquidated when the loss reaches 5,000 − 50 = $4,950 → liquidation price about $50,500 (-49.5%), but a liquidation then costs nearly all $5,000
In cross mode, if another coin's position is $2,000 down → the cushion shrinks to 3,000 − 50 = $2,950, and the liquidation price rises to about $70,500 (-29.5%)
Effective leverage in cross mode = 10,000 ÷ 5,000 = 2x (not the 10x set on screen)
Fees, funding and the other position's maintenance margin are left out to keep it simple
※ Example numbers, for illustration only
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