Choosing the Right Margin Mode in ETA: Comparing Cross Margin and Other Options

Unified Trading Account (UTA) on Gate.io offers traders three different margin modes to manage their positions. The standard cross-margin setup suits most traders, but the platform also provides isolated margin and portfolio margin for specialized strategies. Each mode has its own characteristics, requirements, and rules that must be understood before choosing.

Three Margin Modes: Which One Is Right for Your Strategy

The margin system on UTA is designed to adapt to different types of trading. At account creation, cross-margin is enabled by default, but this does not mean it is the only option. Each mode is tailored for a specific category of market participants and offers unique risk management capabilities.

Isolated Margin (IM) is intended for traders who prefer clear separation between individual positions. In this mode, margin for each position is calculated separately, meaning losses on one position do not automatically affect others. This approach provides greater control but requires careful monitoring of each position independently.

Cross Margin (CM) is the most flexible mode for versatile traders working with spot and derivatives simultaneously. With cross margin, all assets in the account function as a single collateral pool, allowing more efficient capital use and reducing the risk of automatic liquidation.

Portfolio Margin (PM) is aimed at professional participants with a net capital of at least $1,000. This advanced mode considers the overall risk of the entire portfolio, potentially lowering margin requirements for well-hedged positions.

Detailed Comparison of the Three Margin Modes

How Cross Margin Works: Benefits and Features

Cross margin is considered the optimal solution for most active traders due to its flexibility. In this mode, all funds in the account are combined into a single pool serving as collateral for all open positions. This means profits from one position can help prevent liquidation of another.

When working with cross margin, the system uses corresponding assets for calculation depending on the contract type. For example, BTC can serve as collateral for USDT perpetual contracts, with its value automatically converted to USD for margin calculation.

Spot margin trading in cross margin mode is enabled by default, allowing asset borrowing to increase spot positions. Unrealized profits from derivatives can be used to open new positions, providing additional flexibility in capital management.

Isolated Margin: When Maximum Protection Is Needed

Isolated margin mode is designed for more conservative traders who want to clearly separate the risk of one position from another. When selecting this mode, each position is allocated a separate margin amount, and losses on one do not affect others.

However, spot margin trading is unavailable in isolated mode, but automatic margin top-up is supported—useful for protecting active positions from unexpected liquidation. This mode is suitable for traders practicing single, well-controlled positions.

Portfolio Margin for Professional Strategies

Portfolio margin mode represents the pinnacle of advanced risk management. It calculates margin based on the overall risk of the entire portfolio, not individual positions. For well-hedged portfolios, this can significantly reduce margin requirements.

To access portfolio margin, traders must have a net capital of at least $1,000. This mode is especially effective for experienced participants employing complex hedging strategies with a combination of longs and shorts.

Rules for Switching Between Margin Modes

Switching to Isolated Margin

Switching from cross margin to isolated margin is possible if the following conditions are met:

1. No active options orders or open positions on the account
2. No open spot margin trading orders
3. Sufficient assets to cover increased margin requirements
4. No active loans
5. Spot margin trading is disabled
6. The mark price of existing positions must not be worse than the liquidation price after switching
7. Enough assets to allocate to each position without risking liquidation

After successful switching, spot margin trading will be disabled, and automatic margin top-up will also be turned off by default.

Switching to Cross Margin

To switch to cross margin from isolated margin or portfolio margin, the following must be true:

1. Initial margin after switching must be ≤ 100%

Once cross margin is activated, spot margin trading is enabled by default. If positions with different leverage are present, the system will automatically adjust them to the lower leverage to meet safety requirements.

Switching to Portfolio Margin

To activate portfolio margin mode:

1. Initial margin after switching must be ≤ 100%
2. No active orders or positions in hedging mode

Upon successful switching, spot margin trading is automatically enabled, providing a full suite of features for professional trading.

How to Choose the Optimal Margin Mode

Choosing between isolated margin, cross margin, and portfolio margin depends on your trading style and experience level. Cross margin remains the best choice for most traders due to its balance of flexibility and risk management. It maximizes capital utilization and minimizes the risk of unexpected liquidation by pooling all assets into a single collateral pool.

If you prefer strict risk separation between positions, isolated margin offers greater control. For professional traders employing complex hedging strategies, portfolio margin provides the most efficient margin calculations.

Regardless of the mode selected, remember that the chosen margin mode applies to your entire account and cannot be set separately for different trading pairs.