> For the complete documentation index, see [llms.txt](https://fixt.gitbook.io/fixt/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://fixt.gitbook.io/fixt/derivatives/usdt-perpetual-guide/margin-mode-systems.md).

# Margin Mode Systems

There are two margin modes on FIXT: Isolated margin mode and Cross margin mode.

### **What is the Isolated Margin mode?**

The **isolated margin** mode depicts the margin placed into a position is isolated from the trader's account balance. This mode allows traders to manage their risks accordingly as the maximum amount a trader would lose from liquidation is limited to the position margin placed for that open position.

For example, a trader opens a quantity of 1500 BTCUSD position at $10,000 by using 1x leverage. The initial margin used to open the position is 0.15 BTC. Now, he changes the leverage to 3x. The initial margin required (collateral) will then change from 0.15 BTC to only 0.05 BTC. In the event of liquidation, he will only lose the 0.05 BTC initial margin (excluding fees). This allows the trader to limit his risk.

### **What is the Cross Margin mode?**

It is default margin mode on FIXT. The cross margin mode uses all of a trader’s available balance within the corresponding trading pair coin type to prevent liquidation. When the trading pair's equity is lower than the maintenance margin, the position will be liquidated. In the event of liquidation, the trader will lose all his/her equity for that particular trading pair. 

For example, a trader opens a BTCUSDT position. When the BTCUSDT position is liquidated, he will lose all of his USDT balance. BTC balance will not be affected.


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