Crypto Newbie / Simulators / Margin Modes
Cross vs Isolated Margin Simulator
Every perpetual exchange forces you to pick: cross margin (one shared collateral pool) or isolated margin (separate margin per position). Most beginners pick cross because it 'feels efficient', then get wiped out when one bad trade drags down their other winning trades. This simulator lets you set up 3 positions, toggle each mode, drag prices around, and SEE the contagion effect.
Account collateral
Positions
| Symbol | Side | Notional | Entry | Current price | Mode | Iso. margin (if isolated) | P&L |
|---|---|---|---|---|---|---|---|
| BTC | — | $0 | |||||
| ETH | — | $0 | |||||
| SOL | $0 |
Cross-margin account state
Equity (collateral + cross P&L)
$10.00k
Total maintenance required
$800
Buffer (equity − maintenance)
$9.20k
Margin ratio (maintenance / equity)
8.0%
✓ Account safe — buffer positive.
Isolated positions
| Symbol | Iso. margin (if isolated) | P&L | Liquidation price | Buffer to liquidation | Status |
|---|---|---|---|---|---|
| SOL | $3.00k | $0 | $228.00 | $2.80k | Safe |
What cross margin actually does
All your cross-margin positions share one collateral pool. Position A's unrealised gains can absorb Position B's unrealised losses. Your account is liquidated only when total equity (collateral + ALL cross P&L) drops below the sum of maintenance margins. The single biggest failure mode: one massive loser eats through everything, including positions that were profitable. The losers don't get closed; the WHOLE account does.
What isolated margin actually does
Each isolated position has its OWN collateral chunk. Losses on that position can only consume up to that allocated chunk. Other positions are firewalled — they don't share collateral, they don't share liquidation risk. The cost: you can't use Position A's gains to keep Position B alive. The benefit: a single position blowing up doesn't kill the rest of your portfolio.
Why isolation beats cross for beginners
Cross requires position-sizing discipline most beginners don't have. The mental model is wrong — people see 'I have $10k collateral and 3 positions, I can risk a lot on each' — but cross means losing on ALL of them in one bad day. With isolated, the same trader naturally sizes each position to its own $3k chunk; even if all three blow up, the worst case is losing $9k, not $30k of leveraged exposure. The discipline is built into the margin structure.
When cross actually makes sense
Hedged delta-neutral books: long ETH spot, short ETH perp, long BTC perp, short BTC spot. The positions naturally hedge each other; cross margin lets the gains on one leg cushion the losses on another, even during basis volatility. Professional market makers run cross. Retail directional traders should run isolated 95% of the time and only switch when they have an explicit hedging rationale.
Frequently asked questions
+What happens at cross-margin liquidation?
ALL cross-margin positions get force-closed simultaneously. The exchange's liquidation engine sells them into the market (or uses the insurance fund). You lose your entire cross-margin collateral. Isolated positions are untouched — they have their own separate margin and own liquidation triggers.
+Can I switch a position from isolated to cross mid-trade?
On most exchanges yes — Binance, Bybit, OKX all support this. But there's usually a small delay (a few seconds for the engine to recalculate margin requirements). Switching from isolated to cross merges that position's isolated margin into the cross pool. Switching from cross to isolated requires the engine to allocate a specific isolated margin amount from your free cross balance.
+Why does the simulator show different liquidation prices?
Cross liquidation depends on the WHOLE portfolio's state — adding a winning position raises your liquidation price for the losing position because the gains cushion losses. Isolated liquidation only depends on that position's entry, margin, and current price. The simulator computes both correctly; you can see how cross liquidation moves as you adjust other positions.
+Is cross margin used by professional traders?
Yes — but with strict risk frameworks. Pro desks use cross for delta-neutral strategies where the positions naturally hedge (long spot, short perp, cash-and-carry). They never run cross with concentrated directional exposure. The mistake retail makes is using cross with 5 directional longs on correlated assets — when crypto dumps, all 5 hit liquidation together.
+What's 'portfolio margin' — is it different from cross?
Portfolio margin is a more sophisticated version of cross. It considers correlations between positions: holding BTC perp and ETH perp gets less margin requirement than the sum of individual maintenance requirements because the two are highly correlated and likely to lose money together (or win together). Available on Binance/dYdX for institutional accounts. Conceptually it's cross margin with smarter risk calculations.