Isolated vs cross margin is the first setting many traders meet on a crypto perpetuals exchange, and one of the least understood. Both modes answer the same question, how much of your balance stands behind a leveraged position before the exchange closes it, and they answer it in opposite ways.
This guide explains each mode with a worked example, shows when traders tend to pick one or the other, and then explains why a prop account works differently: the limits that matter there are set on the whole account, in dollars, and they are reached far sooner than an exchange liquidation.
Margin, maintenance margin and liquidation in one minute
A perpetual position has a notional value, price times quantity. Initial margin is the collateral the exchange requires to open it, roughly notional divided by leverage. Maintenance margin is a smaller share of the position, typically tiered by position size and coin, that must stay behind it at all times.
When losses eat the collateral down to the maintenance level, the exchange liquidates the position. The margin mode decides which collateral counts: only what you assigned to that position, or everything in the account.
Isolated vs cross margin: the two modes side by side
Leverage also means slightly different things in each mode. In isolated mode it fixes how much margin the position posts. In cross mode it mainly sets the initial margin requirement, while the whole balance stands behind the position.
| Isolated margin | Cross margin | |
|---|---|---|
| Collateral behind a position | Only the margin assigned to it | The available balance of the account or margin pool |
| Most a liquidation can take | That position’s margin | Up to the whole balance |
| Liquidation price | Closer, set mainly by leverage | Further away, set by the balance and other positions |
| Other positions | No effect | Gains on one support another; losses weigh on all |
| Adjusting it | Add or remove margin per position | Deposit or withdraw funds |
A worked example: one bitcoin long, two margin modes
Take a $10,000 wallet and a long of 0.2 BTC at an illustrative $100,000, a $20,000 position. Assume a 0.5% maintenance rate and ignore fees and funding. Real exchanges add both, use the mark price and tier their maintenance rates, so this is a simplified sketch.
In isolated mode at 10× the position posts $2,000. It is liquidated when the loss reaches that margin minus $100 of maintenance, about $1,900, at roughly $90,500. The rest of the wallet is untouched.
In cross mode the whole $10,000 supports the same position. It survives until the loss reaches about $9,900, which needs a fall to roughly $50,500. Liquidation is much further away, but almost the entire wallet is gone if it arrives.
| Mode | Collateral at risk | Approx. liquidation price | Loss if liquidated |
|---|---|---|---|
| Isolated, 10× | $2,000 | $90,500 | $1,900 |
| Cross | $10,000 | $50,500 | $9,900 |
When traders choose each mode
- Isolated suits a single leveraged idea whose worst case you want capped at the margin you assign.
- Isolated also stops one bad trade from dragging down unrelated positions.
- Cross suits hedged or offsetting positions, where a gain on one leg supports the margin of the other.
- Cross makes it less likely that a brief wick liquidates a position, at the cost of exposing more of the balance.
- Neither mode replaces a stop. Both decide when the exchange closes you, not where your plan says you are wrong.
Why a prop account works differently
On a prop evaluation the account itself is the unit of risk. The firm typically publishes a daily loss limit and a maximum loss for the whole account, and every position counts toward them together. The question is no longer which collateral backs a trade, but how much of the account’s loss budget is left.
On a QATS Crypto evaluation the rules are a 10% profit target, a 4% daily loss limit, a 6% end-of-day trailing maximum loss that stops trailing at the starting balance, a 40% consistency rule and 2 minimum trading days. The daily loss counts the day’s closed results plus open positions, fees and funding, and on the current Crypto plans touching it breaches the account. Equity at or below the maximum-loss floor breaches it too, so open losses on every position count at once.
The same position on a prop account
Put the same 0.2 BTC long from $100,000 on a QATS $10K Crypto evaluation, with no other loss that day. The $400 daily limit is reached on a fall to about $98,000, a 2% move, long before either exchange liquidation price. The evaluation balance is simulated, so the money you have at stake is the evaluation fee.
| Setup | What you can lose | Where it ends | Loss when it ends |
|---|---|---|---|
| Exchange, isolated 10× | $2,000 of posted margin | About $90,500 (liquidation) | About $1,900 |
| Exchange, cross | The $10,000 wallet | About $50,500 (liquidation) | About $9,900 |
| QATS $10K Crypto evaluation | The evaluation fee; the balance is simulated | About $98,000 (daily loss limit) | $400, and the evaluation is breached |
How margin works on a QATS Crypto account
QATS Crypto evaluations allow up to 20× on BTC and ETH, 10× on large caps and 5× on other coins. You choose the leverage in the order ticket, up to the plan’s maximum for the instrument, and one instrument has one leverage per account while a position or working entry order exists on it.
Margin limits size, not risk. Before an order is accepted, the server checks that the margin it adds, plus estimated fees and reservations for working entries, still fits within account equity; if not, it is refused for insufficient margin. You can also set a personal margin cap in Risk center, and an order that would take margin in use above it is refused.
These checks cap how large a position can be. The figures that end an account are the daily and maximum loss limits, so size every trade from your stop and those limits.
Frequently asked questions
01Is isolated or cross margin safer?
Isolated margin caps the loss on one position at its posted margin, so it is usually the more contained choice for a single leveraged trade. Cross margin pushes the liquidation price further away but can put the whole balance at risk.
02Does cross margin prevent liquidation?
No. It moves the liquidation price further away by letting the whole balance support the position, but a large enough move still liquidates it, and the loss is then larger.
03Which margin mode matters on a prop account?
Usually the loss limits matter more than any margin setting. A prop account’s daily and maximum loss limits typically apply to the whole account and are reached long before margin would run out, so plan around those limits.
04Can I change leverage on an open QATS position?
No. One instrument has one leverage per account while a position or working entry order exists on it. Close the position and cancel those orders, then choose a new leverage.
Educational content, not investment advice. QATS evaluations and initial funded accounts are simulated; payouts depend on eligibility, verification and the applicable agreement.