BeaconWhat Is Margin in Crypto Trading?
Margin is the collateral you put up to open a leveraged position in perpetual futures trading. When you trade with leverage, you are borrowing against your margin to control a larger position. The margin mode you choose - cross or isolated - determines how that collateral is allocated and what happens when a trade moves against you.
Choosing the right margin mode is one of the most important decisions you make before opening a position. It directly affects your liquidation price, your maximum potential loss, and how efficiently you use your capital. Both modes have legitimate use cases, and most experienced traders use both depending on the situation.
Cross Margin Explained
In cross margin mode, your entire available account balance serves as collateral for all of your open positions. If one position starts losing money, it can draw from the unused margin in your account to avoid liquidation. This means your positions have access to more collateral than what was initially assigned to them.
The primary advantage of cross margin is capital efficiency. Because all positions share the same pool of collateral, you need less total margin to maintain multiple positions. Profitable positions can effectively subsidize losing ones, reducing the chance of any single position being liquidated.
The downside is risk concentration. If one position experiences a large adverse move, it can consume margin from your entire account, potentially triggering liquidations across multiple positions. In the worst case, a single bad trade in cross margin mode can wipe out your entire account balance.
Isolated Margin Explained
In isolated margin mode, each position has its own dedicated margin that is completely separate from your other positions and your remaining account balance. If a position is liquidated, you lose only the margin assigned to that specific trade - the rest of your account remains untouched.
This makes isolated margin ideal for risk management. You know exactly how much you can lose on each trade before you open it. It is essentially a built-in stop-loss mechanism at the position level. If you assign $100 of isolated margin to a trade, that $100 is the maximum you can lose on that position, regardless of how far the price moves against you.
The trade-off is that isolated positions have tighter liquidation prices compared to cross margin positions of the same size. Because the position can only draw from its dedicated margin, even temporary price spikes can trigger liquidation if the margin is insufficient. You may need to monitor isolated positions more actively and add margin if the price moves unfavorably.
Side-by-Side Comparison
| Feature | Cross Margin | Isolated Margin |
|---|---|---|
| Collateral | Shared across all positions | Dedicated per position |
| Max Loss | Entire account balance | Position margin only |
| Liquidation Price | Further from entry (safer) | Closer to entry |
| Capital Efficiency | Higher | Lower |
| Risk Management | Requires discipline | Built-in loss limits |
| Best For | Experienced traders, hedging | Beginners, speculative trades |
When to Use Each Mode
Use cross margin when: You are running multiple correlated positions (like a hedged portfolio), you want maximum capital efficiency, you are comfortable with advanced risk management, or you are confident in your directional thesis and want a wider margin of safety before liquidation.
Use isolated margin when: You are taking a speculative trade with defined risk, you are trying a new strategy and want to limit exposure, you are trading volatile assets where price can spike unpredictably, or you want to be absolutely sure that one bad trade cannot affect the rest of your portfolio.
Many professional traders use a hybrid approach. They keep their core positions in cross margin mode for capital efficiency and use isolated margin for smaller, higher-risk trades. This way, their main portfolio benefits from shared collateral while individual speculative bets are contained. Use our liquidation calculator to compare liquidation prices under each mode before entering a trade.
Margin Modes on Hyperliquid
Hyperliquid supports both cross margin and isolated margin modes. You can select your preferred mode when opening a new position through the Beacon interface. The platform clearly displays your liquidation price, margin ratio, and available balance for each mode so you can make an informed decision.
Hyperliquid also supports adding margin to existing positions and adjusting leverage without closing the trade. This flexibility allows you to adapt your margin strategy as market conditions change. If a cross margin position starts consuming too much of your account, you can adjust. If an isolated margin position needs more room, you can add margin to push the liquidation price further away.