Isolated vs Cross Margin: The Key Difference
45sClearly explains the core difference between isolated and cross margin with concrete liquidation examples, making it highly educational for futures traders.
▶ Play ClipAI Summary
The video explains the difference between isolated and cross margin modes in futures trading, focusing on how each affects position liquidation and strategy. The creator, who trades altcoins with a partial position-building strategy, advocates for cross margin due to its flexibility and ability to withstand temporary drawdowns.
[00:00]
Margin Mode Choice
The creator uses cross margin because it doesn't restrict trading, unlike isolated margin which forces position closure when losses reach 100% of the margin, depending on leverage.
[00:13]
Liquidation Price Example
With 10x leverage, a 10% adverse price move triggers liquidation; with 20x leverage, a 5% move does. For short stop-loss trading, the margin mode doesn't matter.
[00:27]
Cross Margin for Averaging
For strategies that build positions in parts (averaging), cross margin is necessary. The creator trades altcoins, a highly volatile market with manipulation, and uses grid orders under support zones.
[00:40]
Handling Squeezes
During sharp 20-30% squeezes that stop out other traders, cross margin allows the creator to improve their average entry and profit on the first bounce, which is not possible with isolated margin.
[00:53]
Personal Choice
The choice between margin modes is personal, but the creator prefers cross margin for their strategy.
Cross margin is better for traders who average into positions and want to survive temporary adverse moves, while isolated margin suits those using tight stop-losses. The choice depends on one's trading strategy.
Study Flashcards (3)
What is the main difference between isolated and cross margin?
easy
Click to reveal answer
What is the main difference between isolated and cross margin?
easy
Click to reveal answer
Isolated margin limits losses to the margin allocated, while cross margin uses the entire account balance, preventing forced closure until all funds are used.
At what price movement does a 10x leverage position get liquidated?
easy
Click to reveal answer
At what price movement does a 10x leverage position get liquidated?
easy
Click to reveal answer
A 10% adverse price movement.
00:13
Why does the creator prefer cross margin for averaging strategies?
medium
Click to reveal answer
Why does the creator prefer cross margin for averaging strategies?
medium
Click to reveal answer
Because it allows them to hold positions through temporary drawdowns and improve their average entry during squeezes.
00:27
💡 Key Takeaways
💡
Cross Margin Flexibility
Explains the core advantage of cross margin for traders who need flexibility.
📊
Liquidation Math
Provides concrete examples of how leverage affects liquidation price.
00:13
⚖️
Strategy-Specific Choice
Highlights that margin mode choice depends on trading strategy.
00:27Full Transcript
[00:00] Торгуешь на фьючерсах? Какой режим маржи выбрать? Изолированную или кросс? Я работаю на кросс марже, потому что она не ограничивает меня в торговле. Изолированная принудительно закрывает позицию, как только убыток доходит до 100% и зависит от выбранного плеча.
[00:13] Например, если торгуешь с 10 плечом, то движение цены против тебя на 10% закроет твою сделку. Если с 20 плечом, то минус 5% закроет позу. В целом, если торгуешь с короткими стоп-лоссами, то без разницы, в каком режиме маржи торговать.
[00:27] Но если торгуешь по стратегии набора позиций частями, как я, то тогда нужно торговать в режиме кросс-моржи. Я торгую альтами, это очень высоковолатильный рынок с большим количеством манипуляций. Например, я часто выставляю сетку ордеров под зоны поддержки на случай,
[00:40] если будет резкий сквиз на 20-30%, чтобы выбить по стопам всех трейдеров. Если это случается, то всех высаживают, а я существенно улучшаю свою среднюю точку входа и выхожу в плюс на первом отскоке. На изолированной морже так торговать не получится.
[00:53] Но тут выбор каждого.
