Cross margin and isolated margin describe how collateral supports leveraged positions. With cross margin, eligible positions share a pool of collateral. With isolated margin, a particular collateral balance is assigned to an individual position.
How losses affect the account
A losing cross-margin position can consume collateral that also supports other positions. That shared buffer may delay one liquidation, but it can expose more of the account to the same loss.
Isolated margin separates the assigned buffer from the rest of the account. It makes the position’s collateral boundary easier to understand, but automatic top-ups or later additions can change how much capital is exposed. Product-specific rules still govern the result.
Which structure is safer?
There is no universal answer independent of position size, account settings and market conditions. Two accounts using the same margin mode can have very different risks if one has substantially more exposure.
For example, separating two positions does not make them economically independent if both lose when the same asset falls. Conversely, sharing collateral does not diversify the underlying market risk.
When reading an automated strategy’s description, distinguish the margin arrangement from its exposure and exit rules. A label such as “isolated” or “cross” is only one part of the risk picture, not a guarantee that capital is protected.