# Cross and isolated margin: which collateral supports a position?

Cross margin lets multiple positions share supporting collateral, so one position’s losses can consume equity supporting others. Isolated margin separates collateral into a defined account or market boundary. The cited dYdX market design also distinguishes shared versus separate insurance funds; isolation does not remove market, execution or protocol risk.

Evidence: [Markets and margin parameters](https://docs.dydx.community/dydx/modules/governance/governance-adjustable-parameters/markets); [Liquidations on dYdX Chain](https://help.dydx.trade/en/articles/166991-liquidations-on-dydx-chain)

Canonical: https://degreesofsatoshi.com/encyclopedia/cross-vs-isolated-margin/
Published: 2026-10-02
Substantively modified: 2026-10-02
Independently verified by an automated reviewer: 2026-10-02T19:18:00.092Z
Data current through: 2026-10-02

AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied.

## Key facts

- **Cross:** The cited cross markets share collateral and an insurance fund. ([Markets and margin parameters](https://docs.dydx.community/dydx/modules/governance/governance-adjustable-parameters/markets))
- **Isolated:** The cited isolated markets have segregated collateral and their own fund. ([Markets and margin parameters](https://docs.dydx.community/dydx/modules/governance/governance-adjustable-parameters/markets))
- **Interaction:** Cross liquidation calculations account for other positions’ requirements. ([Liquidations on dYdX Chain](https://help.dydx.trade/en/articles/166991-liquidations-on-dydx-chain))

## Track the equity that can absorb a loss

Imagine a shared account has 2,000 equity supporting two positions. A 700 loss on one reduces the same equity available to support the other, even if the second position’s price is unchanged.

If instead two properly segregated accounts each have 1,000, a loss in one is evaluated within its own boundary under the implementation’s rules. The illustration does not assume every interface offers automatic account segregation.

Evidence: [Liquidations on dYdX Chain](https://help.dydx.trade/en/articles/166991-liquidations-on-dydx-chain); [Markets and margin parameters](https://docs.dydx.community/dydx/modules/governance/governance-adjustable-parameters/markets)

## Identify what isolated actually means

Isolation can describe a market, a subaccount or a position setting. Check where collateral resides, whether transfers are automatic and which insurance fund applies. A label alone does not establish that every risk or asset in the broader platform is separate.

Evidence: [Markets and margin parameters](https://docs.dydx.community/dydx/modules/governance/governance-adjustable-parameters/markets)

## Read portfolio effects before a displayed price

Cross-margin liquidation depends on the total account and requirements from other positions. A displayed estimate can change without a new trade in the position being inspected. Funding payments and transfers also alter the supporting equity, so a remembered liquidation price is not permanent.

Evidence: [Liquidations on dYdX Chain](https://help.dydx.trade/en/articles/166991-liquidations-on-dydx-chain)

## Questions

### Does isolated margin mean the position cannot be liquidated?

No. It still needs sufficient equity within its isolation boundary.

Evidence: [Liquidations on dYdX Chain](https://help.dydx.trade/en/articles/166991-liquidations-on-dydx-chain); [Markets and margin parameters](https://docs.dydx.community/dydx/modules/governance/governance-adjustable-parameters/markets)

## Claims and scope

### cross-vs-isolated-margin-quick-answer

Cross margin lets multiple positions share supporting collateral, so one position’s losses can consume equity supporting others. Isolated margin separates collateral into a defined account or market boundary. The cited dYdX market design also distinguishes shared versus separate insurance funds; isolation does not remove market, execution or protocol risk.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

### cross-vs-isolated-margin-fact-cross

Cross: The cited cross markets share collateral and an insurance fund.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

### cross-vs-isolated-margin-fact-isolated

Isolated: The cited isolated markets have segregated collateral and their own fund.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

### cross-vs-isolated-margin-fact-interaction

Interaction: Cross liquidation calculations account for other positions’ requirements.

Scope: {"collection":"defi","dataAsOf":"2026-10-02","blockHeight":null}

## Sources

- [Markets and margin parameters](https://docs.dydx.community/dydx/modules/governance/governance-adjustable-parameters/markets) — dYdX Foundation. Initial/maintenance margin definitions and cross versus isolated market scope. Locator: Liquidity tiers; Market types. Retrieved: 2026-10-02T18:53:21.108Z.
- [Liquidations on dYdX Chain](https://help.dydx.trade/en/articles/166991-liquidations-on-dydx-chain) — dYdX Operations Services. Distinguishes eligibility, order execution and account losses. Locator: Margin; fillable price; liquidation. Retrieved: 2026-10-02T18:53:20.755Z.

## Revision history

- 2026-10-02: First publication after primary-source research and separate automated verification.

## Cite this entry

Degrees of Satoshi editorial project. “Cross and isolated margin: which collateral supports a position?.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/cross-vs-isolated-margin/