Futures and leverage
A futures contract is a derivative instrument built on margin and leverage mechanisms. You only need to put up a portion of funds as margin to open positions, rather than paying the full value of the contract. Leverage allows you to control larger position sizes with smaller capital, thereby amplifying potential returns. With leverage, you can use 10x, 20x, or even higher leverage—for example, by depositing only 10,000 USDT as margin, you can trade contracts worth 100,000 or 200,000 USDT. However, leverage also magnifies potential losses, and insufficient margin may lead to liquidation.
Position modes
Futures trading supports two margin modes: Cross Margin and Isolated Margin. You can choose between them when placing an order. For details on how to adjust the margin mode and leverage, refer to How to Switch Margin Mode and Adjust Leverage.
Cross margin mode
In cross margin mode, all available balances in the account are shared as margin across all open positions. All positions share the account's maintenance margin ratio (MMR), which helps reduce the risk of liquidation caused by short-term volatility. However, when the account's MMR falls to 100% or below, a liquidation may be triggered, potentially closing all open positions (according to the platform's liquidation mechanism). Cross margin mode is suitable for users who seek higher capital efficiency.
Isolated margin mode
In isolated margin mode, each position has its own independent margin allocation, separate from the account balance. This means any potential loss is limited to the margin assigned to that position. The mode helps control risk for individual trades and prevents a single mistake from causing a total account loss.
For more information on initial and maintenance margin calculations, refer to Initial Margin and Maintenance Margin.
Notes
• In one-way mode, you can switch freely between cross and isolated margin mode even while holding positions. In hedge mode, the margin mode cannot be switched while positions are open. For details, refer to How to Switch Between One-Way and Hedge Mode. • Adjusting leverage does not affect realized or unrealized PnL. When leverage is changed, the position size remains the same, but the required initial margin will be adjusted accordingly. Increasing leverage reduces the initial margin requirement, improving capital efficiency but increasing risk exposure. Decreasing leverage raises the margin requirement, reducing efficiency but offering greater safety for both the account and positions.
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