Binance Cross Vs Isolated

Are you new to margin trading and confused about the difference between Binance Cross and Isolated modes? Don’t worry, we’ve got you covered! In this article, we’ll explain the key features and benefits of both modes to help you make an informed decision.

Isolated Margin

In Isolated Margin mode, each trading pair has its own independent margin account. This means that you can only deposit, hold, and borrow specific cryptocurrencies for each isolated margin account. For example, if you have an isolated margin account for BTCUSDT, you can only use BTC and USDT as collateral. The great thing is, you can open multiple isolated margin accounts for different trading pairs.

Here are some important points to remember about Isolated Margin:

  • Each trading pair is an isolated margin account that operates independently.
  • Adding collateral to one isolated margin account will not automatically increase the margin for other accounts.
  • The margin for each isolated margin account is calculated based on the assets and liabilities of that specific account.
  • The risk of each isolated margin account is isolated, so if one account gets liquidated, it won’t affect other accounts.

To learn more about the specific rules and regulations for trading in Isolated Margin mode, you can refer to the Binance Isolated Margin Trading Rules.

Cross Margin

In Cross Margin mode, the margin is shared across all your positions. Here’s what you need to know about Cross Margin:

  • You can only have one Cross Margin account, and all trading pairs are available through this account.
  • The assets in your Cross Margin account are shared among all your positions.
  • The margin for your Cross Margin account is calculated based on the total value of your assets and liabilities in the account.
  • The system will check your Cross Margin account’s margin level and send you notifications to either increase your margin or close positions. If a liquidation occurs, all positions will be liquidated.
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For more detailed information about Cross Margin trading, check out the Binance Cross Margin Trading Rules.

Example

Let’s illustrate the difference between Isolated and Cross Margin with an example:

On Day 1, both User A and User B deposit 400 USDT into their margin accounts and trade with 5x leverage. User A chooses Cross Margin mode while User B opts for Isolated Margin mode.

On Day 3, the price of ETH rises to 230 USDT, while the price of BCH drops to 180 USDT.

On Day 5, the price of ETH decreases further to 220 USDT, and BCH falls to 120 USDT. Assuming neither user increases their margin, these changes will have different effects on their trades.

Remember, margin trading can be complex, so it’s essential to understand the rules and risks involved. If you want to delve deeper into margin trading on Binance, we suggest checking out the Binance Margin Trading Guide provided by Binance Academy.

Now that you have a better understanding of Binance Cross and Isolated Margin modes, you can choose the option that suits your trading style and risk tolerance. Happy trading!

Note: The content of this article is for informational purposes only and should not be considered as financial or investment advice. Always do your own research before engaging in any trading activities.

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