Futures cross or isolated
what happens if i have 2 orders open on futures and 1 of them is in profit,the other is in loss,and i close the one in loss,so will the loss be deducted from my margin balance or will my other position get exited?
sorry for bad english
they are independent . do you cross or isolated ?
Thats just hedge mode. You will lose whatever your loss is, and your order in profit will stay in profit, no deduction will occur.
In cross it will take whole account as margin. Why people use cross? To avoid liquidation but that’s not true
Ex:- let’s assume you have 1k balance in your future account. You want to go for a trade with 50% of your account balance ie. $500 with leverage 20x.
When you took a trade at 20,000 BTC.
In isolated:- margin:- $500, Lev:- 20x, entry price :- 20,000, size(usdt):- 500×20= 10,000.
Above scenario will be same for cross alos. But the main difference is comes in liquidation.
In isolated, liquidation price will be 5% because it will took 50% of your account balance
But in cross, liquidation will be 10% because it will take whole account balance
Isolated, liquidation price:- 19,000, when you reach at 19k, you $500 will be liquidated
Cross, liquidation price:- 18,000, when you reach 18k your whole account will be liquidated
Benefits:- in cross you will get a little bit long liquidation gap as compared to isolated.
Note:- Calculation and numbers may varry according to your inputs
Since the rest of these answers were mostly half-answers:
Margin balance = Wallet balance + realized profit + unrealized profit
So, your margin balance is affected before your close the one in loss too. When you close off the position, it’s your Wallet balance that will change. Your margin balance will have been affected anyway (this is important because it determines your liquidation price)
The difference between cross and isolated is that in cross, your initial collateral or margin = your wallet balance (since you use your whole wallet as collateral)
In isolated, you allocate some specific margin to a position to begin with, which is not necessarily equal to your whole wallet. In this case, the closing of a negative position will not affect the margin balance for another position