🎯Isolated Margin
The isolated margin model is a margin management method used in perpetual trading, in contrast to the cross margin model. It has the following main features:
Independent Margin Accounts
In the isolated margin model, each contract position has its independent margin account. This means that each position has its own margin pool and does not share it with other positions. This independence ensures that losses or gains in one position do not affect others.
Individual Liquidation
Under the isolated margin model, when a position incurs a certain level of loss, only that specific position is liquidated, while other positions remain unaffected. This helps maintain the integrity of other positions and reduces the overall risk of the account.
Leverage Control
The isolated margin model allows traders to control the leverage of each position more effectively. This helps avoid excessive leverage, as each position can be managed individually based on market conditions and risk tolerance.