Isolated vs cross margin

Isolated margin assigns a fixed amount of collateral to a single position, so its maximum loss is that amount; cross margin lets every open position draw on the whole account balance, which delays liquidation but puts the entire balance at risk.

Why it matters

The margin mode decides how a losing position ends. In isolated mode a position that goes badly is liquidated on its own and the rest of the account is untouched; in cross mode the exchange keeps the position alive by consuming free balance and, if the move continues, liquidates the account as a whole. Cross mode is convenient for hedged or professionally managed books; for automated signal execution, where several positions can be open at once and nobody is watching, it turns one bad signal into a threat to every other trade. The mode also changes the liquidation price you see, since in cross mode it depends on the balance.

How AlgoVesta handles it

AlgoVesta lets you choose the margin mode per bot in the wizard, and the mode is set on the exchange for the symbol before the order is placed, together with the leverage cap. Isolated margin combined with a fixed margin per signal gives a hard ceiling on what any single trade can lose, which is the configuration most users run. Where an exchange does not allow the mode to be changed while a position is open, the venue's current setting applies to that order. The dashboard shows the margin mode, margin, leverage and liquidation price of each position as the exchange reports them. Behaviour differs slightly between the 16 supported exchanges, and those differences are deliberately preserved rather than papered over. See Supported exchanges and the liquidation price entry.

Example

A trader has $2,000 on a futures account and runs a channel at $100 margin per signal, 10x, isolated. A signal on a low-liquidity coin gaps 15% against the position overnight. The position is liquidated and $100 is lost; the other three open positions and the remaining $1,600 are unaffected. In cross mode the same gap would have pulled free balance into the position first, and a continued move could have liquidated all four positions together.

Common mistakes

• Running cross margin "to avoid liquidation" and not noticing that the whole account is now the collateral.
• Switching modes on the exchange by hand while a bot is running, so the bot's assumption about risk per trade no longer holds.
• Comparing liquidation prices across positions in cross mode as if they were independent.
• Assuming every exchange supports both modes on every symbol; some do not, and the setting is then ignored.