Isolated Margin

What is Isolated Margin?

An isolated margin has been assigned to a single position and cannot be shared with other locations. The key benefit of isolated margin is that any margin shortfall or position liquidation won't have an impact on other positions in the portfolio. This might be appropriate for a highly leveraged, speculative position that a trader wants to closely monitor and exert more control over.

Since the margin is taken directly out of your wallet and is separate from the remainder of your account balance, it is frequently the safer option. Your entire holding is not in danger if a trade goes bad.

An isolated margin will help you manage your risk. You have complete control over the risk of your position because you decide how much margin is exposed to the trade.