# 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.

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<summary><strong>Case Study</strong></summary>

User A has 10,000 USDX in his Exchange Wallet. He uses 5,000 USDX as collateral to open a 20x leveraged short BTC perpetual position. However, due to the price volatility of BTC, User A's position gets liquidated. In this case, with the isolated margin model, User A only loses the 5,000 USDX used as position collateral. The 5,000 USDX in his wallet remains unaffected.

</details>


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