Cross vs isolated margin

Understand shared cross collateral and position-level isolated margin on PerpNow.

Updated 2026-11-05

Two ways to allocate collateral

PerpNow offers cross and isolated margin modes for perpetual positions. Cross positions share the account's available collateral and equity calculations. Isolated positions are evaluated against margin assigned to that market position, together with its unrealized PnL. The mode changes which collateral is exposed to a loss; it does not remove market risk or guarantee a liquidation price.

Cross margin

With cross margin, several positions draw on the same account balance. A gain in one position can contribute to account equity available to support another, and a loss can reduce the cushion available to all cross positions. The engine aggregates cross exposure when it checks maintenance. This can use collateral more efficiently, but it means a single market move may affect the account's other cross positions.

Cross maintenance uses each position's notional and the maximum leverage configured for its market. The requirement is notional divided by twice maximum leverage. The leverage selected for opening a position affects initial margin and exposure, while the maximum market leverage determines the maintenance formula. Mark price is used for risk valuation when available.

Isolated margin

Isolated mode keeps position collateral in a market-specific margin allocation. The position's equity consists of its isolated margin and unrealized PnL. A loss can consume that allocation without drawing on the rest of the account's cross balance, but the isolated position may be liquidated even when the account has funds elsewhere. Some markets are configured as strict-isolated: they do not allow cross margin and may restrict margin removal.

You can add isolated margin to increase the buffer. Removing margin is constrained: the margin left behind must satisfy the larger of initial margin and 10% of position value, including unrealized PnL. Changing leverage alone does not automatically move margin. The application may refuse a mode change while that market has a position or open orders.

Choosing a mode

Cross can suit traders who intentionally manage a shared account-level collateral pool and understand correlated risk. Isolated can make the amount allocated to one position easier to bound, but it is not a stop-loss and a fast market can still create losses. Review the maximum leverage and maintenance requirement for the market, and monitor mark price, not only the latest trade.

Requirements are not interchangeable

Initial margin is based on position value and selected leverage. Maintenance margin is a separate risk threshold calculated from notional and the maximum leverage for the market. For example, a market whose maximum leverage is 40x has maintenance equal to 1.25% of notional under the formula; this does not mean the trader can safely use that amount as initial margin. Price movement, open orders and realized fees can reduce equity, and the actual account state is what the risk engine evaluates.

In cross mode, account-level equity and maintenance span the cross positions, so adding a new position can change the shared risk profile even if another market's price is unchanged. In isolated mode, adding margin changes the position's allocated buffer. It does not alter the position size or market price, and it cannot guarantee that the position will avoid liquidation during a gap or a rapid move.

Before switching modes, close or cancel relevant exposure if the interface requires it; the engine disallows switching while a position or open order exists in that market. Some markets require isolated mode. Read the market settings and confirm the selected mode in the position panel after the action commits.

When you compare two configurations, consider both margin requirement and what collateral is exposed. Cross may reduce idle collateral for a portfolio that is monitored as a whole, while isolated can create a clearer per-market boundary. Neither mode eliminates counterparty, oracle, execution or system risk.

Risk checks can trigger market liquidation when equity is below maintenance. Read the liquidation guide and the margin documentation. Try the BTC testnet market with test funds only; PerpNow balances have no real value.