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SOL falls to 176. Where does the loss go? Isolated 500lost 500kept SOL longETH long Liquidated Open 500 USDT left Cross 600 lost 400 left SOL long + ETH long share it Both open 400 USDT equity
SOL falls to 176.Where does the loss go? Isolated500 USDT left 500lost 500kept SOL longETH long Liquidated Open Cross400 USDT equity 600 lost 400 left SOL long + ETH long share it Both open

Same two trades. Isolated keeps a loss in one place; cross shares it.

Isolated and cross margin

Isolated margin gives each position its own margin. Cross margin backs all positions with one shared balance, which gives more room but puts everything at risk.

Lesson 5 of 86 min3 parts

Updated . Cryptathon rules checked on .

Isolated margin gives each position its own margin, so a loss can take only that margin. Cross margin backs all positions with one shared balance, so a position gets more room, but one bad move can liquidate everything. Cryptathon uses isolated margin only. With two 500 USDT margins, one position can be liquidated while the other stays open.

By the end, you can

  1. 1Say what a loss can take under isolated margin
  2. 2Work out the room a position has under cross margin
  3. 3Compare what each mode loses when the price keeps moving

1 of 3

How does isolated margin work?

With isolated margin, each position has its own margin, and a loss on it can take only that margin. With cross margin, one shared balance backs all your positions: a position gets more room, but one bad move can liquidate them all.

On Cryptathon every position uses isolated margin. When you open a position, its margin leaves your free balance and stays with that position. If the position is liquidated, it loses that margin, and your other positions do not change.

Worked example

Two longs, one bad move

You have 1,000 USDT. You open two 10x longs of 5,000 USDT each: 25 SOL at 200 USDT, and an ETH long. Leave out fees to keep the sums short. Then SOL falls to 176 and ETH does not move. What happens?

  1. 1
    Find the margin of each positionPosition value divided by leverage.
    5,000 ÷ 10 = 500 USDT
  2. 2
    Find the free balanceBoth margins left the free balance.
    1,000 − 500 − 500 = 0 USDT
  3. 3
    Find the SOL liquidation priceThe 10x rule of thumb: about 9.5% below the entry.
    200 − 200 × 0.095 = 181 USDT
  4. 4
    Compare it with the new priceSOL went 5 USDT past the liquidation price.
    181 − 176 = 5 USDT
  5. 5
    Find what is left of your 1,000The SOL long loses its own 500 USDT of margin, and no more.
    1,000 − 500 = 500 USDT

AnswerThe SOL long is liquidated near 181 and loses its 500 USDT. The ETH long stays open with its own 500 USDT. You keep half your money.

SOL price, USDT 200 190 180 170 SOL liquidated ≈ 181 Entry 200 176 Your 1,000 USDT 500lost 500kept SOL longETH long LiquidatedOpen
SOL price, USDT 200 190 180 170 Liquidated ≈ 181 Entry 200 176 Your 1,000 USDT 500lost 500kept SOL longETH long LiquidatedOpen
Figure 1 Isolated margin with 1,000 USDT and two 10x longs. Each has its own 500 USDT. When SOL falls to 176, the SOL long is liquidated near 181 and loses its 500. The ETH long keeps its 500.
Your turn You hold two isolated positions, each with 200 USDT of margin, and 300 USDT of free balance. Position A is liquidated. How much money is still in your account?
  1. 0 USDT

    Under isolated margin a liquidation cannot reach the other position or the free balance.

  2. 300 USDT

    You left out position B. Its 200 USDT of margin is still yours.

  3. 500 USDT

    Right. Position A loses its 200 USDT. Position B keeps 200, and the free balance keeps 300: 200 + 300 = 500.

  4. 700 USDT

    Position A's margin is gone. Only B's margin and the free balance are left.

Show the answer

C: 500 USDT. Position A loses its 200 USDT. Position B keeps 200, and the free balance keeps 300: 200 + 300 = 500.

2 of 3

How does cross margin work?

Cross margin is a different mode. Cryptathon uses isolated margin only. Other exchanges may offer cross margin, and their rules differ in detail. The general idea is this: on an exchange that offers cross margin, your whole balance backs all your positions. A loss on one position uses money that also holds up the others.

For these examples, use a simple shared account: liquidation closes both positions when total equity reaches their combined maintenance margin. Total equity is the balance plus the PnL of every position. So one position can lose much more than its own share of the margin before anything is closed, if the rest of the account can cover it.

Worked example

The same two longs under cross margin

Same 1,000 USDT and the same two 5,000 USDT longs. SOL falls to 176, ETH does not move. Use 0.5% maintenance margin. What happens?

  1. 1
    Find the loss on SOL25 SOL, each 24 USDT below the entry.
    25 × 24 = 600 USDT
  2. 2
    Find the total equityThe ETH long has no PnL.
    1,000 − 600 = 400 USDT
  3. 3
    Find the SOL maintenance marginAt the new SOL price.
    25 × 176 × 0.5% = 22 USDT
  4. 4
    Find the total maintenance marginBoth positions count.
    22 + 5,000 × 0.5% = 47 USDT

AnswerNothing is liquidated. Equity of 400 USDT is still far above the 47 USDT line. Under isolated margin the SOL long would already be closed.

Worked example

How far can SOL fall?

Same account. ETH stays flat. About how far can SOL fall before the account is liquidated?

  1. 1
    Find the total maintenance margin at entryTwo positions of 5,000 USDT.
    10,000 × 0.5% = 50 USDT
  2. 2
    Find the loss the account can takeThe whole balance, less the maintenance margin.
    1,000 − 50 = 950 USDT
  3. 3
    Share it over the SOL25 SOL carry the whole loss.
    950 ÷ 25 = 38 USDT
  4. 4
    Take it off the entryThe rough liquidation price under cross margin.
    200 − 38 = 162 USDT

AnswerAbout 162 USDT, a fall of about 19%. Under isolated margin the same long is liquidated near 181, about 9.5% below the entry.

SOL price, USDT 190 180 170 160 200 Entry 200 Isolated Cross Isolated ≈ 181 (−19) Cross ≈ 162 (−38)
SOL price, USDT 190 180 170 160 200 Entry 200 Isolated Cross ≈ 181 ≈ 162 Isolated: about 19 USDT of room Cross: about 38 USDT of room
Figure 2 The SOL long from 200 USDT. Under isolated margin it is liquidated near 181. Under cross margin, with the ETH long flat, the shared 1,000 USDT holds it until about 162.
Your turn Under cross margin you have 1,000 USDT and two positions. One has a loss of 700 USDT, the other no PnL. The total maintenance margin is 40 USDT. What happens?
  1. The losing position is liquidated

    Under cross margin the shared balance holds it up. Total equity is 300 USDT, above the 40 USDT line.

  2. Nothing yet

    Right. Total equity is 1,000 − 700 = 300 USDT, still above the 40 USDT maintenance margin.

  3. Both positions are liquidated

    In this example that happens only when total equity falls to 40 USDT.

  4. Only the position with no PnL stays safe

    Both positions depend on the shared balance.

Show the answer

B: Nothing yet. Total equity is 1,000 − 700 = 300 USDT, still above the 40 USDT maintenance margin.

3 of 3

What is the trade-off between isolated and cross margin?

The same feature cuts both ways. Under cross margin the shared balance can carry a loss through a dip that would liquidate an isolated position. If the price keeps going, the same shared balance is used up, and every position can go with it.

Worked example

SOL falls to 160

Same 1,000 USDT and the same two longs. This time SOL falls to 160 and ETH stays flat. What does each mode lose?

  1. 1
    Find the SOL loss at 160Equal to the whole starting balance.
    25 × 40 = 1,000 USDT
  2. 2
    Isolated: find what is leftThe SOL long was closed near 181 and lost only its 500 USDT. The ETH long keeps its own 500.
    1,000 − 500 = 500 USDT
  3. 3
    Cross: find the total equity at 160The SOL loss would use up the whole balance. In this example the account is liquidated before that, near 162.
    1,000 − 1,000 = 0 USDT

AnswerUnder isolated margin you lose 500 USDT and the ETH long stays open. Under cross margin the account is liquidated near 162, both longs are closed, and almost all of the 1,000 USDT is gone, though ETH did not move.

What is left of your 1,000 USDT Start: 1,000 500 400 500 ≈ 0 IsolatedCross IsolatedCross SOL closedboth open SOL closedall closed SOL at 176SOL at 160
What is left of your 1,000 USDT Start: 1,000 SOL at 176 Isolated: SOL closed 500 Cross: both open 400 SOL at 160 Isolated: SOL closed 500 Cross: all closed ≈ 0
Figure 3 What is left of 1,000 USDT. SOL at 176: isolated keeps 500, cross keeps 400 with both longs open. SOL at 160: isolated keeps 500, cross keeps almost nothing.
Your turn Under cross margin, SOL falls to 176 and then rises back to 200. Under isolated margin the same SOL long was liquidated near 181. What is the difference?
  1. The cross position is still open and its loss is gone

    Right. Under cross margin the shared balance carried it through the dip; under isolated margin the loss was taken at 181.

  2. Both are open again

    A liquidated position does not come back when the price returns.

  3. Both lost 500 USDT

    Under cross margin nothing was closed, so the loss went away when SOL came back.

  4. The cross account lost 600 USDT for good

    That loss was only on paper while SOL was at 176. It went away when SOL rose back.

Show the answer

A: The cross position is still open and its loss is gone. Under cross margin the shared balance carried it through the dip; under isolated margin the loss was taken at 181.

Common questions

Does Cryptathon use isolated or cross margin?

Cryptathon uses isolated margin only. Each position has its own margin, which starts at coin quantity × entry price ÷ leverage, with no fees in it. A loss on one position can take only that margin, so a liquidation never closes your other positions or takes your free balance. On Cryptathon the app shows the liquidation price of each open position, and it does not depend on your other trades.

Is cross margin safer than isolated margin?

Neither one is safer in every case. In the example, cross margin carried a SOL long through a fall to 176 that liquidated the isolated long. But when SOL fell to 160, cross margin lost almost all of the 1,000 USDT, and isolated margin lost only the 500 USDT of the SOL long. Cross gives more room; isolated keeps a loss in one place.

How is the liquidation price worked out under cross margin?

On an exchange that offers cross margin, it depends on the whole account, not on one position. The usual idea is that the account is liquidated when total equity falls to the total maintenance margin. So the liquidation price of one position moves when your balance changes or when your other positions gain or lose. Each exchange has its own exact rules.

Check yourself

Three questions on the whole lesson.

Question 1 of 3 You hold one isolated position with 100 USDT of margin and have 900 USDT of free balance. The position is liquidated. What is the most you lose?
  1. 1,000 USDT

    Under isolated margin the free balance is not at risk.

  2. 100 USDT

    Right. A position can lose its own margin and no more.

  3. 900 USDT

    The free balance stays. Only the position's margin is lost.

  4. Nothing, the free balance covers it

    Under isolated margin the free balance is never used to hold the position up.

Show the answer

B: 100 USDT. A position can lose its own margin and no more.

Question 2 of 3 Under cross margin you hold a long and a short. The long gains 200 USDT and the short loses 300 USDT. Your balance is 1,000 USDT. What is the total equity?
  1. 700 USDT

    You left out the gain on the long. Total equity counts every position's PnL.

  2. 1,200 USDT

    You left out the loss on the short.

  3. 900 USDT

    Right. 1,000 + 200 − 300 = 900 USDT.

  4. 1,500 USDT

    A loss takes away from equity. It does not add to it.

Show the answer

C: 900 USDT. 1,000 + 200 − 300 = 900 USDT.

Question 3 of 3 Which mode lets one position lose more than its own margin?
  1. Isolated margin

    Under isolated margin a position can lose only its own margin.

  2. Cross margin

    Right. The shared balance backs every position, so one loss can use all of it.

  3. Both

    Isolated margin keeps the loss inside the position's own margin.

  4. Neither

    Under cross margin one position can use the whole shared balance.

Show the answer

B: Cross margin. The shared balance backs every position, so one loss can use all of it.

What to remember

  1. How does isolated margin work?Under isolated margin a position can lose its own margin and no more; the rest of your account does not change.
  2. How does cross margin work?Cross margin shares the money backing your positions, so a position gets more room, and one loss can put the other positions at risk.
  3. What is the trade-off between isolated and cross margin?Cross margin gives a position more room but can lose the whole balance; isolated margin closes sooner but keeps the loss to one position.
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