What is the difference between cross and isolated margin on Coinbase?

Coinbase Advanced offers two margin trading models: cross margin, where all account equity backs every position, and isolated margin, where each trade has its own dedicated collateral—key for managing risk based on your strategy and experience.

Jul 27, 2025 at 11:56 am

Understanding Margin Trading on Coinbase

Margin trading allows users to borrow funds to increase their trading position beyond what would be available with their own capital alone. On Coinbase Advanced, traders can engage in margin trading using two distinct models: cross margin and isolated margin. Each model affects how collateral is managed and how risk is distributed across positions. It’s essential to understand these differences to manage leverage effectively and avoid unintended liquidations. The choice between cross and isolated directly impacts how your account equity supports open positions.

What Is Cross Margin?

With cross margin, all available equity in your margin wallet acts as collateral for all open leveraged positions. This means if you have multiple trades open, the system pools your entire balance to prevent liquidation. If one position starts losing money, the platform automatically uses funds from other assets in your wallet to maintain the required margin ratio.

• Your total account balance is shared across all positions
• Liquidation occurs only when the entire account’s margin ratio falls below the maintenance threshold
• This model offers flexibility but increases systemic risk because one losing trade can affect all others
  

  This setup is beneficial for experienced traders who want to maximize capital efficiency, but it demands close monitoring since a single volatile position can trigger a cascade across your portfolio.

  What Is Isolated Margin?

  
  Isolated margin assigns a fixed amount of collateral to each individual position. Each trade is independent—its gains or losses do not impact other positions. If one trade gets liquidated, the rest remain unaffected because they have their own dedicated collateral.
• You manually allocate how much margin to use per trade
• Risk is compartmentalized: no spillover between positions
• Ideal for beginners or those testing strategies without risking the entire account
  

  This model gives you granular control over exposure. For example, if you open a long BTC/USD position with 0.1 BTC as isolated collateral, only that 0.1 BTC is at risk—not your ETH, SOL, or cash balances.

  Step-by-Step: How to Switch Between Cross and Isolated on Coinbase Advanced

  
  To change margin modes during trade setup:
• Navigate to the margin trading interface on Coinbase Advanced
• Select the asset pair (e.g., BTC/USD)
• Locate the “Margin Mode” toggle near the order form
• Choose either “Cross” or “Isolated”
• For isolated mode, input the exact amount of collateral you wish to allocate to that specific trade
• Confirm the order after reviewing the liquidation price and leverage level
  

  This process must be repeated for each new trade—you cannot globally set a default mode. Every position starts in cross margin unless explicitly changed before execution.

  Liquidation Mechanics: Cross vs. Isolated

  
  In cross margin, liquidation happens when the overall account equity drops below the maintenance margin requirement. The system uses your full balance to absorb losses, delaying liquidation until the entire portfolio is at risk. In contrast, isolated margin liquidates only when the individual position’s allocated collateral falls below its specific maintenance threshold.
• Cross: Liquidation affects the whole account; harder to predict exact trigger points
• Isolated: Clear per-position liquidation levels; easier to calculate risk per trade
  

  For instance, if you allocate 0.5 ETH to an isolated short and ETH price rises sharply, only that 0.5 ETH is lost. In cross, a similar move might pull from your BTC or stablecoin holdings to keep the position alive—or liquidate everything if equity runs out.

  When to Use Cross vs. Isolated Margin

  
  Use cross margin when you want to optimize capital usage across multiple correlated positions or when you’re confident in portfolio diversification reducing overall risk. Use isolated margin when you’re experimenting with high-leverage strategies, testing new assets, or want to ensure a single mistake doesn’t wipe out your entire margin balance. Neither is universally better—it depends on your strategy, risk tolerance, and experience level.
  

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  Frequently Asked Questions

  Can I convert an existing cross margin position to isolated margin on Coinbase?
  
  No. Once a position is opened in cross margin, you cannot switch it to isolated. You must close the position and reopen it with isolated margin selected during order entry.

  Does isolated margin support automatic top-ups like cross margin does?
  
  No. Isolated margin locks in the initial collateral amount. If the position moves against you, no additional funds from your wallet will be used—unlike cross margin, which dynamically pulls from available equity.

  Will my unrealized P&L in one isolated position affect another isolated position?
  
  No. Each isolated position operates independently. Gains or losses in one do not impact the margin or liquidation risk of another.

  How does leverage interact differently in cross vs. isolated margin?
  
  Leverage is applied per position in both modes. However, in cross margin, higher leverage on one trade may reduce available margin for others since all funds are shared. In isolated, leverage only affects the assigned collateral for that specific trade.