What is Cross vs isolated margin?

Cross and isolated margin are the two ways a venue decides which collateral stands behind a leveraged position. In cross margin, the whole account balance backs every open position, and the profit of one offsets the loss of another. In isolated margin, each position has its own margin, set when it is opened or added later, and nothing else in the account can be used to save it or be lost with it.

The trade-off is distance against containment. A cross position can take a much larger move before liquidation, because the entire account is there to absorb it; the cost is that if it does get liquidated, it takes the account’s margin with it, and a losing position can pull healthy ones under. An isolated position is liquidated sooner, at the point where its own margin runs out, and the loss stops there.

Venues spell out the difference in their liquidation rules. On Hyperliquid, when the backstop takes over a cross position, the whole cross margin goes with it; for an isolated position only that position’s margin does. On Lighter an isolated position is treated as an account of its own, with the same liquidation stages measured against its margin alone. Most venues default to cross, and isolated has to be chosen per position.

Which one is safer depends on what the positions are. A long on one coin hedged by a short on another works in cross, where the legs offset each other; in isolated each leg can be liquidated on its own move. A speculative trade that should never touch the rest of the account belongs in isolated. TrueHold shows each position with its liquidation price next to the rest of the portfolio, so the account-level risk of a cross book is visible in one place.