Every crypto futures position is backed by margin, and the margin mode decides which part of your account that margin can draw on. The two common modes, cross and isolated, behave very differently when a trade moves against you. The difference comes down to one question: if this position fails, what else fails with it?
How isolated margin works
In isolated mode, each position gets its own fixed pot of margin. Whatever is assigned to the position is normally the most it can lose. If price reaches the liquidation level, the exchange closes the position and that margin is gone, but the rest of the balance is not touched.
Example (hypothetical numbers): an account holds 1,000 USDT. A trader opens a 1,000 USDT position at 10x leverage with 100 USDT of isolated margin. A move of roughly 10% against the position would use up that 100 USDT; fees and maintenance margin mean liquidation happens a little earlier. The other 900 USDT is untouched.
The trade-off is that a small pot puts the liquidation price close to the entry. Many exchanges let a trader add margin to an isolated position manually, which moves liquidation further away, but that is an active decision, not an automatic one.
How cross margin works
In cross mode, the available balance in the account backs all open positions at once. Losses on one position are absorbed by the shared balance, and unrealised profit on another can help as well. Liquidation happens only when the whole shared pool falls to the maintenance requirement.
Same example, but cross: the 1,000 USDT position now has close to 1,000 USDT of cushion instead of 100, so the liquidation price sits much farther from entry (still approximate, because of fees and maintenance margin). A short spike is less likely to trigger it.
The catch is what is at stake. If price keeps going, the loss is no longer capped at 100 USDT. It can consume the entire balance, including money meant for other trades.
What happens to the rest of the account
- Isolated: the damage from one bad position is limited to its assigned margin. Other positions and the free balance survive, though a liquidation still means a full loss on that trade.
- Cross, one position: the liquidation price is far away, but the whole balance is at risk.
- Cross, several positions: they share one pool. A losing trade drains margin the others were relying on, so a healthy position can be liquidated because of a different one. Correlated positions, such as several altcoin longs, can move against the trader together, which speeds this up.
Also worth knowing: in cross mode the liquidation price is not fixed. It shifts as other positions gain or lose, as funds are deposited or withdrawn, and as funding fees accrue. A number noted at entry can be out of date an hour later.
When each mode is used
Traders tend to pick isolated when they want a hard cap on the loss from a single idea, when they are trying something new or highly volatile, or when they run several unrelated positions and want them kept apart. Cross tends to appear with low leverage, with hedged positions that offset each other, or when the trader prefers to manage total account risk instead of per-position risk. Neither mode is safer by itself; each moves the risk to a different place. Isolated limits the loss per position but liquidates more easily. Cross makes liquidation harder to reach but exposes everything.
Details differ by exchange: switching modes may be blocked while positions are open, some accounts use a unified or portfolio margin model with its own rules, and the mode is often set per symbol rather than for the whole account.
In both modes, a stop-loss only helps if it sits before the liquidation price; otherwise the exchange closes the position first. Leveraged trading carries a high risk of loss, and you can lose your entire margin and, in cross mode, potentially your entire balance.
BitMe monitors futures positions on Bybit, OKX and BloFin around the clock and sends Telegram alerts, including liquidation-risk alerts based on the share of margin used. Alerts inform; they do not close positions, and the app connects with a read-only API key.