Isolated Margin
Margin allocated to a single position, limiting risk to that position alone.
What is Isolated Margin?
Isolated margin on a Perp DEX refers to a risk management approach where the margin (collateral) for a specific trading position is separate from other positions or funds in a trader’s account. For example, if a trader opens a 10x leveraged BTC perpetual swap on GMX with $1,000 in isolated margin, only that $1,000 is at risk of liquidation, protecting other positions or wallet funds.
This contrasts with cross margin, where all funds in an account are shared across positions. Isolated margin allows traders to control risk per trade, making it ideal for high-risk strategies or volatile markets. Perp DEXs implement this via smart contracts, ensuring transparency and precise margin tracking for each position.
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