Here's the bottom line: margin is the portion of your principal locked up when you open a futures position, calculated as Position Value ÷ Leverage. In Isolated margin mode, each position uses its own independent margin, so liquidation only costs you that position's margin. In Cross margin mode, your entire account balance is shared as margin across all positions, so liquidation wipes out your whole account. Beginners are strongly advised to use Isolated margin, since it keeps the loss on any single trade under control. First open the Binance Official Site, Android users go through the Official Binance App, and iPhone users should check the iOS Install Guide.
Below we'll walk through how margin is calculated, initial margin, maintenance margin, Isolated vs. Cross margin, and the practical steps for adding margin.
Futures and spot trading are completely different: on spot, you use 100% of your own money to buy coins, and price moves directly translate into your gain or loss. On futures, you use a small amount of "margin" and leverage to control a much larger position.
Example: BTC is trading at 67,000, and you go long 1 BTC at 10x leverage (a position worth 67,000 USDT). The required margin = 67,000 / 10 = 6,700 USDT.
This 6,700 USDT is your "deposit." When price rises, your gains are added directly to this deposit; when price falls, the deposit gets eaten into. Once the deposit is consumed down to near the maintenance margin level, liquidation is triggered.
There are two margin concepts on futures that beginners often confuse.
Initial Margin: the amount actually locked up when you open the position. Usually equals Position Value / Leverage.
Maintenance Margin: the minimum margin required to keep a position from being liquidated. Usually equals Position Value × Maintenance Margin Rate (which ranges from 0.4%-2.5% depending on the coin and position size).
Liquidation determination: when your effective margin (Initial Margin minus unrealized loss) drops below the Maintenance Margin, forced liquidation is triggered.
Example:
Long BTC at 10x, position 10,000 USDT, initial margin 1,000 USDT, maintenance margin rate 0.5% (i.e., 50 USDT).
When price moves against you by 9%, unrealized loss is 900 USDT, leaving 100 USDT in effective margin — still above the 50 USDT maintenance margin.
When price moves against you by 9.5%, unrealized loss is 950 USDT, leaving 50 USDT in effective margin — exactly equal to the maintenance margin, triggering liquidation.
The maintenance margin rate varies by position size and coin. Binance uses a "tiered margin" mechanism:
| Position Size (BTC/USDT Perpetual) | Initial Margin Rate | Maintenance Margin Rate | Max Leverage |
|---|---|---|---|
| 0 - 50,000 USDT | 0.40% | 0.40% | 125x |
| 50,000 - 250,000 | 0.50% | 0.50% | 100x |
| 250,000 - 1,000,000 | 1.00% | 1.00% | 50x |
| 1,000,000 - 7,500,000 | 2.50% | 2.50% | 20x |
| > 7,500,000 | 5.00% | 5.00% | 10x |
In other words, the larger the position, the higher the required margin rate and the lower the available leverage. This is Binance's way of preventing a large position's liquidation from triggering a chain reaction across the market.
Beginner positions are usually small (a few hundred to a few thousand USDT), which falls into the first tier: a 0.4% margin rate and up to 125x leverage.
In Isolated margin mode, each position has its own dedicated margin pool.
Key features:
Best for:
In Cross margin mode, your entire account balance acts as shared margin across all positions.
Key features:
Best for:
Here's a side-by-side comparison:
Account balance: 1,000 USDT, with two positions open:
Remaining available balance: 600 USDT.
Under Isolated margin:
Under Cross margin:
Isolated margin is clearly more suitable for beginners.
| Comparison | Isolated | Cross |
|---|---|---|
| Margin | Independent per position | Shared account balance |
| Liquidation impact | Loss on a single position | Entire account wiped out |
| Adjusting margin | Can add/remove manually | Automatically drawn from balance |
| Interaction between positions | No effect | Positions draw on each other |
| Risk isolation | Strong | Weak |
| Capital efficiency | Lower | Higher |
Step 1: Go to the futures trading page.
Step 2: Select your trading pair (you must first close any existing position on that pair).
Step 3: Tap "Isolated Nx" or "Cross Nx" shown below the trading pair name.
Step 4: A selection box pops up — choose "Isolated" or "Cross."
Step 5: Confirm.
Keep in mind:
In Isolated margin mode, if you see your position's unrealized loss approaching liquidation but still believe in your original direction, you can manually add margin to push back the liquidation price.
Step 1: Find the corresponding position in "Position Info."
Step 2: Tap the "+" or "Adjust Margin" button next to the margin field.
Step 3: Choose "Increase" or "Decrease," enter the amount, and confirm.
Step 4: Margin is transferred from your account balance into that position, and the liquidation price adjusts accordingly.
Keep in mind:
In Cross margin mode, there's no per-position liquidation concept — the account's overall margin ratio determines everything.
Account Margin Ratio = Account Equity / Total Position Value
When the account margin ratio reaches 100% (equity = maintenance margin), your entire account gets force-closed across all positions.
Example:
Account balance 1,000 USDT, total position value 50,000 USDT, equity = 1,000 - cumulative unrealized loss.
Maintenance margin = 50,000 × 0.5% = 250 USDT.
When equity drops to 250 USDT (i.e., cumulative unrealized loss of 750 USDT), the entire account is force-closed.
Strategy One: Single-direction oversized BTC position (trend following)
Isolated margin is recommended. Keep a close eye on one position — if it gets liquidated, you only lose that one.
Strategy Two: BTC long + ETH short hedge
Cross margin is recommended. Two offsetting positions hedge each other, and Cross margin lets your account balance automatically support whichever side needs it.
Strategy Three: Grid trading (placing multiple buy and sell orders at once)
Cross margin is recommended. Multiple small positions balance each other out, and Cross margin offers better capital efficiency.
Strategy Four: Intraday scalping
Isolated margin is recommended. Each short-term trade has its own independent stop-loss, and Isolated margin keeps things clearer.
Strategy Five: Trading altcoins
Isolated margin is recommended. Altcoins are more volatile, and Isolated margin prevents a single liquidation from wiping out all your positions.
Cost One: Funding rate.
Settled every 8 hours based on your position value. Longs and shorts pay each other depending on the direction of the rate, and Binance takes a small cut. Beginners often overlook this cost.
Cost Two: Trading fees.
Calculated on position value (not margin). At 10x leverage, the fee is effectively 10 times what it would be relative to your margin.
Cost Three: Slippage.
The slippage on market orders when you place them. During periods of low liquidity, opening a position can eat into your margin right away.
Cost Four: Flash wicks.
In rare cases, price briefly spikes through your liquidation price and snaps back, but your position still gets liquidated. This is almost impossible to fully protect against.
Q: Is the default mode Isolated or Cross margin? A: Binance defaults to Cross margin. The first thing beginners should do after opening an account is switch to Isolated margin.
Q: What margin ratio should I consider dangerous? A: A margin ratio above 50% calls for caution, above 70% you should reduce your position or add margin, and above 80% Binance will send you a warning notification.
Q: Can I withdraw margin I've manually added? A: Yes. Under Isolated margin, just tap "Decrease Margin." But this brings the liquidation price closer, so use it carefully.
Q: Can I transfer money in the futures wallet back to spot? A: Yes, as long as you don't have any open positions using that margin. Once you close all positions, the margin returns to your futures wallet, and you can transfer it to your spot wallet from there.
Q: Does the BNB fee discount consume margin? A: No. Fees paid in BNB are deducted from your futures wallet's BNB balance, not from your USDT margin.
Q: What is Multi-Assets Mode? A: An advanced mode that lets USDT-margined contracts use other assets like BUSD or BNB as margin. Beginners don't need this — standard USDT margin is fine.
Q: Can I cancel an order after margin has been locked? A: Yes. Canceling an order immediately releases the corresponding margin. Margin tied to an already-filled portion of the order stays locked.
When beginners first start trading futures, they should switch their margin mode to Isolated and start experimenting with 100-300 USDT per position. Only consider Cross margin and more complex strategies once you truly understand the liquidation mechanism.