Margin mode determines how collateral supports positions and how the trading system assesses their margin risk. It affects which funds can absorb losses, whether positions share support, and where liquidation thresholds are evaluated. It is distinct from the position mode that governs holding long and short positions simultaneously.
Common arrangements
Isolated margin assigns support to a specific position. Cross margin uses eligible shared account resources, allowing losses in one position to consume funds that also support others. Available balances, collateral discounts and treatment of unrealized profits depend on the venue.
Portfolio margin typically evaluates combined risk across supported instruments using scenario models and recognized offsets. An offset can reduce a margin requirement without eliminating risk; correlations, model assumptions and collateral values can change.
Understand the scope before switching
A margin mode may apply to one position, a product or an entire account. Some changes require orders or positions to be cleared first, while others trigger an immediate recalculation. Supported products and eligible collateral can also differ between modes.
Changing mode does not erase existing losses or guarantee that liquidation is avoided. A position that shares account support can threaten more than its initial allocation, while isolated support may not automatically receive profits from another position. The applicable account rules determine the actual boundary.