Isolated Margin Trading (Derivatives Trading)

Isolated margin trading is a margin trading approach that enables traders to limit their potential losses to the initially allocated margin, thereby restricting the margin assigned to each position. By utilizing isolated margin, traders can manage risk for individual positions, especially in volatile markets where highly leveraged positions are more likely to be liquidated. For instance, if a trader’s position is liquidated using isolated margin mode, only the isolated margin balance is affected, rather than the entire available account balance. Cross-margin trading, on the other hand, represents the opposite approach to isolated margin trading.