Contract trading under a unified trading account supports various services like spot trading, margin trading, futures contracts, perpetual contracts, and options contracts. The available margin modes are Isolated Margin and Full Margin. Each contract mode offers distinct advantages, allowing traders to choose based on their needs.
1. Isolated Margin: Position Isolation for Risk Reduction
Key Benefits
- Independent Risk Management: Each position's margin and profit/loss are calculated separately, isolating risks and rewards.
- Limited Loss Exposure: In case of liquidation, only the margin of the affected position is lost, preventing broader account impact.
- Flexible Allocation: Traders can allocate specific amounts to individual positions without risking the entire account balance.
Example Scenario
- Account Balance: 10 BTC + other assets.
- Isolated Margin Setup: Allocate 5 BTC to a BTC-denominated contract.
- Outcome: If the position faces liquidation, only the 5 BTC margin is lost, safeguarding the remaining 5 BTC and other assets.
👉 Explore Isolated Margin Strategies
2. Full Margin: Shared Margin for Enhanced Capital Efficiency
Key Benefits
- Cross-Position Margin Sharing: Positions in the same settlement currency (e.g., BTC/USDT) share margin, offsetting gains/losses.
- Dynamic Rebalancing: Profits from one position can be instantly reused as margin for others, optimizing capital utilization.
Example Scenario
- Full Margin Setup: Trade BTC-denominated perpetual contracts while holding a BTC/USDT leveraged long position.
- Outcome: Both positions share margin. Profits from one can settle partially, boosting available margin for other trades.
👉 Maximize Capital Efficiency with Full Margin
Critical Considerations
Full Margin Risks
- Extreme Market Events: A heavily losing position may deplete the entire account balance for that currency.
- Cross-Position Impact: All shared-currency positions are interdependent.
Isolated Margin Safeguards
- Position Independence: Losses in one position don’t affect other currencies or positions.
- Targeted Risk Containment: Ideal for volatile markets or experimental strategies.
FAQs
Q1: Which margin mode suits beginners?
A: Isolated Margin is safer for new traders due to its risk-limiting design.
Q2: Can I switch margin modes mid-trade?
A: No, margin modes are set per position upon opening and cannot be changed afterward.
Q3: How does Full Margin improve liquidity?
A: By pooling margins, unused funds in one position support others, reducing idle capital.
Q4: Is Isolated Margin costlier due to lower leverage?
A: Not necessarily—while leverage might be lower, the risk/reward ratio is more controlled.
Q5: What happens during a Full Margin liquidation?
A: The exchange uses all shared-currency assets to cover losses, potentially zeroing the balance.
Q6: Which mode is better for hedging?
A: Full Margin excels here, as opposing positions automatically offset盈亏 (profits/losses).
Final Recommendations
- Conservative Traders: Opt for Isolated Margin to compartmentalize risks.
- Advanced Traders: Use Full Margin to leverage cross-position synergies.
- Always Monitor: Regardless of mode, track market conditions and adjust strategies proactively.