Which one has higher returns, isolated position or cross position? One article to clarify the difference between isolated position and cross position

In cryptocurrency trading, isolated position and cross position are two common trading methods, but there are differences between the two. It can be understood that full position means putting all eggs in one basket, and isolated position means putting all eggs in one basket. Distributed into multiple baskets, relatively speaking, the cross position mode is suitable for hedging investors, and the isolated position mode is suitable for short-term trading investors, and is also more suitable for novice users. Understand the types of investors that are suitable for them, and the isolated position and cross positions Which one has higher returns? Which one makes more money, isolated position or full position? The level of income mainly depends on the trading strategy. Relatively speaking, the risk of a full position is higher. If the operation is done properly, you will make more money. Next, the editor of the currency circle will talk about these two concepts in detail.

Which one has higher returns, isolated position or full position?

The income from isolated trading and cross-margin trading depends to a large extent on market conditions and investors' personal trading strategies. Investors' trading strategies also have an important impact on the returns of these two trading methods.

In the cross position mode, traders cannot adjust the leverage ratio by themselves. Cross-margin accounts support all cross-margin trading pairs, and margins are shared. Once a liquidation occurs, all assets in the account will be forcibly liquidated.

In the isolated position mode, each trading pair has an independent position, the margins are isolated from each other, and the profit and loss and margin rate are calculated independently. This means that if a trading pair is liquidated, it will not have an impact on other trading pairs.

In actual transactions, investors should choose isolated trading or full position trading based on personal risk preferences, investment goals and market conditions. For investors who are willing to take on higher risks and have the ability to handle market fluctuations, position trading may be the way to achieve higher returns. However, market risks need to be carefully considered to avoid unacceptable losses. On the other hand, cross-margin trading may be more suitable for investors with a lower risk appetite who are more focused on capital preservation. When choosing a trading method, you should fully evaluate your personal situation and avoid blindly following the trend or taking risks. Which one is more profitable, isolated position or full position?

Under good market conditions, cross-margin trading usually brings higher profits, while isolated margin trading may perform even better under such circumstances. However, when market conditions are weak, the risks of isolated trading will also increase, which may lead to greater losses. Therefore, when choosing an investment strategy, you need to decide whether to use isolated position or cross position trading based on market conditions and personal risk tolerance. Isolated trading is relatively more flexible and can better control risks, but it also requires more professional knowledge and skills. Although cross position trading may bring higher returns

In the isolated position mode, the position margin is a fixed value. It starts with the initial margin, and the amount of margin can be changed later by adjusting leverage, risk limits, etc. When the margin balance is lower than the maintenance margin, forced liquidation will be triggered. At this time, the amount of the position margin is the maximum loss that the user needs to bear.

Isolated position margin = opening quantity * average opening price / leverage multiple

Assuming you buy a 0.1 BTC position in the BTCUSDT contract at a price of 50,000 USDT, the starting leverage multiple is 25x,

, then the margin for the isolated position is: 50,000*0.1/25= 200USDT

If affected by price fluctuations, when the position held by the user is strengthened, the user will only lose the margin amount of the position held in that direction. , will not affect other funds in the contract account.

In the cross position mode, all balances in the user account are used as position margin. Users can set positions under multiple contracts to be in cross-margin mode, and all positions set in cross-margin mode can share the account balance as margin. However, the unrealized profit and loss portion of a profitable position cannot be used as margin for other positions.

Initial margin for a full position = Opening quantity * Average price for opening a position / Leverage multiple

Margin for a full position = All balances for a full position

Suppose you start at a price of 50,000 USDT To buy a 0.1 BTC position in the BTCUSDT contract, the full position leverage is 25x and the full position capital is 1,000 USDT.

Then the initial margin for the full position is: 50,000 * 0.1 *25% = 200USDT

However, the position margin is still 1,000USDT.

All available funds in a single contract account are regarded as available margin. When the position loss exceeds the account balance, it will be liquidated.

The difference between isolated position and cross position

The difference between isolated position and cross position is mainly reflected in the following aspects:

The risk distribution is different. The isolated position mode spreads the risk to each position, while the cross position mode gathers all funds to jointly resist risks.

Margin requirements are different. In the isolated margin model, each transaction needs to calculate and maintain margin independently, while in the cross margin model, all margins in the account are shared.

Potential gains are different from losses. The cross-margin model may lead to higher returns when predicting the market correctly, but it may also lead to greater losses. The isolated margin model allows traders to limit losses on each trade, thereby reducing overall losses.

Operation complexity varies. The isolated margin model requires traders to manage margin for each transaction, which may increase the complexity of the operation. The cross-margin model is relatively simple, but requires more attention in risk management.

Fund utilization rates are different. Since margins are managed separately, the capital utilization rate of the isolated margin model is usually lower than that of the cross margin model.

Potential earnings limits vary. Compared with the cross margin model, the potential profit of the isolated margin model may be lower due to the limitation of margin allocation.

The isolated position mode is suitable for investors who have higher requirements for risk control and hope to limit losses to a smaller range, while the cross position mode is suitable for investors who can bear greater risks and hope to pursue higher returns. .

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