Isolated vs cross margin: how they differ

Isolated margin backs a position only with the collateral assigned to it, so a liquidation can cost at most that amount; cross margin backs every cross position with the whole account, which pushes liquidation prices further away but puts the whole balance behind each of them. Which of the two applies changes the liquidation price, what happens to the rest of the account in a liquidation, and how profits and losses of one position affect the others.

This guide uses the margin rules Hyperliquid publishes, where both modes exist side by side, and works through the same position in both modes.

Cross margin: one pool for all positions

On Hyperliquid, cross margin is the default. Deposits are first credited to the cross margin balance, and positions open in cross margin unless another mode is chosen.¹ All cross positions draw on the same pool of collateral, which Hyperliquid describes as maximal capital efficiency.²

Three properties follow from sharing one pool:

• Unrealised profit is reused. Profit on one cross position is automatically available as initial margin for new positions.²
• Losses are shared. A losing cross position eats into the same equity that supports every other cross position, so all their liquidation prices move closer to the price at the same time.
• The leverage setting does not decide the liquidation price. A cross position at lower leverage simply uses more collateral; its liquidation price depends on the account value, not on the leverage chosen.³

Cross positions are liquidated when the account value, including unrealised profit and loss, falls below the maintenance margin times the total open notional of the account.²

Isolated margin: a fence around one position

Isolated margin assigns collateral to one asset and keeps it there. Liquidations in that asset do not affect other isolated positions or the cross account, and the other way round.² The same maintenance margin rule applies, but the only inputs are the isolated margin and the notional of that one position.

What differs in daily use:

• Margin can be added or removed after opening. Each change moves the liquidation price.
• Unrealised profit stays inside. On an isolated position it counts as additional margin for that position, not for new ones.²
• Leverage sets the liquidation price. The allocated margin is the notional divided by the leverage, so higher leverage means less margin and a liquidation price closer to entry.³

Strict isolated and HIP-3 modes

Some assets are strict isolated: they work like isolated margin, but margin cannot be removed once added; it is released in proportion as the position is closed.² Builder-deployed markets (HIP-3) can also run in a "no cross" mode, which allows isolated margin with margin removal but no cross margin. Whether cross positions on different HIP-3 venues share margin depends on the account mode chosen.²

The same position in both modes

Neither mode is safer in general. Isolated margin caps the loss of a single position and accepts an earlier liquidation for it. Cross margin delays liquidation by putting more collateral behind the position, and in exchange exposes more of the account.

The difference also shows up in a backstop liquidation, the step that follows when the order book cannot absorb the closing orders in time:

Sources for the table: Hyperliquid Docs, "Margining" and "Liquidations".²³

Two cross positions at once

The interaction between cross positions is where most surprises come from. Suppose a cross account holds a BTC long and an ETH short. If both coins rise, the long gains and the short loses; the account value may barely change, and both liquidation prices stay roughly where they were. If BTC falls while ETH rises, both positions lose at once, the account value falls on both legs, and both liquidation prices move towards the price together.

That is why a liquidation price shown for a cross position is only true at the moment it is shown. Hyperliquid states that it may not be the actual liquidation price because funding payments and the unrealised profit or loss of other cross positions change it.³ An isolated position's liquidation price moves only with its own funding and its own margin changes.

Taking money out

Withdrawing profit is limited in both modes. Unrealised profit can be withdrawn only if the margin that remains is at least 10% of the total notional of all open positions and also meets the initial margin requirement:²

transfer_margin_required = max(initial_margin_required, 0.1 * total_position_value)

"Transferring" here includes withdrawals, moves to the spot wallet and isolated margin transfers, but not trading. The initial margin used by cross positions cannot be withdrawn at all.²

Frequently asked questions

Which mode is the default on Hyperliquid?

Cross margin. Deposits go to the cross balance first, and positions open in cross margin by default.¹

Does higher leverage move a cross liquidation price closer?

Not by itself. In cross margin the liquidation price depends on the account value; a lower leverage setting just uses more collateral.³ Adding size, however, does move it, because the notional grows against the same equity.

Can a liquidation in an isolated position touch the rest of the account?

No. When an isolated position is backstop liquidated, only that position and its isolated margin move to the liquidator; cross margin and other positions are untouched.³

Checking your own numbers

The liquidation calculator computes the liquidation price in both modes for Hyperliquid's main perpetual markets (not the builder-deployed HIP-3 markets), using their current margin tiers; in cross mode it needs the account equity and treats it as backing this one position. For open positions, distance to liquidation explains how far a position is from being closed, and Liquidation Guard watches a wallet read-only and alerts when a position gets within a chosen distance. How many such liquidation prices sit at each level across the market is what the liquidation heatmap guide explains.