Introduction to Isolated Margin Trading
Isolated margin trading allows traders to limit risk exposure by isolating the collateral for each position. This guide covers the rules, risk management, and liquidation processes for isolated margin trading across various derivatives products.
Core Trading Rules
Contract Mode Requirements
- Single-currency collateral: Available balance must ≥ order currency amount
- Cross-currency collateral: Total equity must ≥ occupied margin + order collateral
- Portfolio margin: Total equity must ≥ occupied margin + order collateral
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Product-Specific Rules
Isolated Margin Trading
Key Components
| Component | Description | API Field |
|---|---|---|
| Position Assets | Net purchased amount after fees | pos |
| Liability | Borrowed amount + interest | liab |
| Margin | Collateral in position | margin |
| Entry Price | Weighted average opening price | avgPx |
Trading Scenarios
Long Position Example (10x Leverage)
- BTC price: $100,000
- Trade size: 1 BTC
| Collateral Type | Position Assets | Liability | Margin |
|---|---|---|---|
| Base Currency | 1 BTC | -100,000 USDT | 0.1 BTC |
| Quote Currency | 1 BTC | -100,000 USDT | 10,000 USDT |
Perpetual/Delivery Contracts
Supports both:
- Hedge Mode (bi-directional positions)
- One-way Mode (single-direction positions)
Key metrics include:
- Maintenance Margin Rate
- Liquidation Price
- Unrealized P&L
Options Trading
| Metric | Description |
|---|---|
| Position Value | Contracts × Mark Price |
| P&L | (Mark Price - Entry Price) × Size |
| Margin Balance | Initial margin ± adjustments |
Risk Management Framework
Margin Call Thresholds
| Product | Warning Level | Liquidation Level |
|---|---|---|
| Margin | 300% | 100% |
| Contracts | 300% | 100% |
| Options | 115% | 100% |
Liquidation Process
- Order cancellation when MMR ≤ 100%
- Partial position reduction for large accounts
Full liquidation if:
- Position can't be reduced sufficiently
- Account remains under-margined post reduction
FAQs
Q: How is liquidation price calculated for margin positions?
A: It varies by collateral type. For BTC/USDT with base currency collateral:
Liquidation Price = (Liab × (1 + MMR)) / (Position Assets + Margin)
Q: What happens to remaining funds after liquidation?
A: Any remaining position balance transfers to your account (subject to rounding).
Q: Can I add margin to prevent liquidation?
A: Yes, you can manually add margin to any isolated position.
Q: How are options positions liquidated?
A: Option sellers pay maintenance margin until position is closed or collateralized.
Q: Do isolated positions affect my other accounts?
A: No, isolated positions have independent risk from other accounts.
Best Practices
- Monitor maintenance margin rates closely
- Understand product-specific liquidation mechanics
- Use stop-loss orders proactively
- Consider position sizing relative to margin requirements
Note: All position tier details align with classic account mode specifications.