Cross margin shares eligible collateral between positions. Isolated margin assigns collateral to a specified position. These modes change which funds support a loss, not the price exposure of an unchanged contract quantity.
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The account configuration and venue rules define the actual boundary. Neither label establishes a universal liquidation price or a guaranteed maximum loss.
What margin supports
Initial margin is collateral required to open the position. Maintenance margin is the requirement for keeping it open. Price losses and holding charges can reduce the equity available to meet that requirement.
Where the collateral can be used
Cross margin
A loss can reduce the collateral supporting other eligible positions.
Isolated margin
$6,500 remains outside these two isolated allocations.
The diagram allocates a hypothetical $10,000. It shows the difference between a shared pool and two isolated allocations without assuming any particular venue’s default settings.
Isolated margin keeps a specified allocation separate
Consider a $20,000 linear ETH position with $2,000 of assigned margin. Its initial leverage is 10x. A 10% adverse price move produces a $2,000 price loss before costs.
Liquidation can occur before that loss because maintenance margin must remain available. Adding collateral changes the isolated allocation and increases the funds committed.
The Hyperliquid margin documentation describes isolated collateral and exceptions for strict isolated markets. Review the exact market rather than assuming every position has identical controls.
Cross margin shares eligible equity
Now assume $20,000 of eligible account equity supports that same $20,000 position, with no other positions or obligations. Exposure relative to total equity is 1x.
A 34% adverse price move produces a $6,800 price loss. Equity would be $13,200 before costs. It does not consume the full $20,000 account, as a 10x order-form setting might suggest.
Other positions, collateral valuation, withdrawals, and charges can change this result. Only eligible funds count under the account’s rules.
Compare equal positions and explicit assumptions
| Hypothetical input | Isolated example | Shared-equity example |
|---|---|---|
| Initial position value | $20,000 | $20,000 |
| Supporting equity | $2,000 assigned | $20,000 eligible |
| Initial exposure / supporting equity | 10x | 1x |
| Price loss at a 1% adverse move | $200 | $200 |
| Loss / initial supporting equity | 10% | 1% |
The table excludes costs and assumes the position remains open. It compares equal price exposure with different supporting collateral.
Liquidation starts before equity reaches zero
The dashed marker shows the threshold. A stop order and a liquidation process can use different trigger prices.
The separate liquidation illustration uses a $10,000 BTC position and explicitly stated assumptions. It explains the threshold, not a venue-specific ETH quote.
Understand which positions interact
Shared equity can let a gain support another eligible position. It can also let a loss reduce collateral supporting the rest of the account.
Two different assets do not create a guaranteed hedge. A BTC long and ETH short can both lose under some price paths. Review quantity and correlated exposure separately.
Portfolio margin uses a specified risk model. A unified account name does not prove that every product receives the same offsets or collateral treatment.
Review settings before changing margin
Check whether the venue allows the change with open positions or orders. Confirm which balances move, which obligations remain, and whether liquidation estimates update.
Read restrictions on adding or removing isolated collateral. Do not assume that a withdrawal or transfer will complete during a disruption.
Include funding and execution risk
Funding or borrow charges can reduce equity while market prices remain unchanged. The payment basis and account debit rules depend on the product.
A stop-market order can fill beyond its trigger price. A stop-limit order can remain unfilled. Neither makes shared collateral a fixed-loss arrangement.
Use the risk-management guide for position-size examples and the funding guide for payment calculations.
A margin review checklist
- Identify all collateral eligible for the position.
- Record position quantity, initial margin, and maintenance requirements.
- Check other positions and open orders that use the same equity.
- Include funding, borrowing, and execution charges.
- Review the effects of adding, removing, or transferring collateral.
- Confirm the venue’s displayed liquidation estimate and its stated limits.
Does cross margin always give a lower liquidation price?
No.
Direction, eligible equity, other positions, collateral values, and venue rules determine the threshold. Compare the same position and explicit balances.
Is isolated margin an exact maximum-loss guarantee?
It separates a specified allocation under venue rules.
Added collateral, account obligations, and liquidation mechanics still require review.
Does changing leverage change dollar profit on the same position?
No.
An unchanged linear contract quantity has the same price profit or loss. Changing leverage alters the initial margin requirement.
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