Margin
Isolated vs cross margin on Polymarket
Isolated margin decides how much of your account one bad trade is allowed to eat. Cross margin decides how many of your other trades it gets to take with it. That is the whole choice, and Polymarket has already made it for you unless you go looking.
Short answer
Polymarket’s web app opens new positions in isolated margin: each position gets its own dedicated allocation of collateral, and a liquidation closes only that position and blocks new orders only on that market. Cross margin is opt-in through the API’s leverage configuration — updateLeverage with crossMargin: true — and shares one pool of collateral across positions, so unrealised profit on one supports margin on another.
The trade is blast radius. A cross liquidation blocks new orders on every market, cancels resting orders on every cross market, and unwinds positions one at a time. And the thing that does not change between the two: maintenance margin is a flat 2.5% of notional on a 20x market in both modes, at every size and every leverage setting.
Is Polymarket Perps isolated or cross margin by default?
If you open a position in the Polymarket web app and never touch a margin setting, it is isolated. The interface does not ask you at the point of trade.source
Cross is a configuration change, made through the API’s leverage configuration for a specific instrument: the same call that sets your leverage carries a crossMargin flag, and setting it true moves that instrument to the shared pool. It is per-instrument, not per-account. You can run bitcoin cross and every stock isolated in the same account.source
There is one gate on it. Each instrument carries an isolated_only flag, and a market with that flag set rejects cross outright.source 39 of the 39 listed markets allow cross. Check the flag on a market you have not traded before — a newly listed or unusually thin instrument is the sort of thing that ships isolated-only.
Isolated, precisely
An isolated position holds a dedicated allocation of collateral, and that allocation is the only thing standing behind it. Nothing else in your account can save it, and it cannot reach anything else in your account.source
- Liquidation scope — closes the affected position, in full, and nothing else.source
- Order blocking — new orders blocked on the affected market only. The rest of the account keeps trading.
- Worst case — you lose the allocation, and nothing more. The number was fixed the moment you set it.
The field that is not what it says
For an isolated position, the initial_margin the API reports is not a requirement you must maintain. It is the position’s live equity.source
InitialMargin = SignedAllocation + UnrealizedPnL − SettledFundingSigned allocation is what you have put in or taken out. Unrealised PnL moves every time mark does. Settled funding accumulates hourly. So the number drifts continuously while you sit still. The name is legacy; margin would describe it better.
An isolated position’s reported initial margin is its equity, not its requirement. It moves when nothing about the position has.
Cross, precisely
Cross positions share the account’s collateral. There is no fence between them: unrealised profit on one position counts as margin supporting another. A short that is winning genuinely holds up a long that is losing.source
The bill for that arrives at liquidation. Cross is evaluated as one account, so a breach is an account-level event.source
- New orders are blocked on every market — not just the market that broke. The whole account goes order-blocked while the liquidation runs.
- Resting orders are cancelled on every cross market — including limit orders you were relying on to exit somewhere else.
- Positions unwind one at a time, across successive cycles, until equity recovers above the threshold.source It is not a single liquidating trade; it is a sequence, and you are a passenger for all of it.
There is a subtler consequence, which is that a cross position’s liquidation price is not a property of that position. It depends on the available balance in the cross account — everything that is not this position’s own equity — so it moves every time anything else in the account does. That is the mechanism behind a liquidation price that changes while you watch.
Does cross margin lower your maintenance margin?
MM = Notional × MMR, where MMR = 0.5 / MaxLeverageThe floor is identical; the modes differ only in what counts as being above it. Isolated counts one allocation. Cross counts everything. The arithmetic at every leverage setting is here.
The same trade, both modes
One position, one entry, one leverage setting, priced both ways: equity meets maintenance margin, with maintenance margin charged on notional at the liquidation price rather than at entry.source
A 10x long on Bitcoin (BTC-USD), 0.5 units at an entry of 100,000 — $50,000 of notional, so $5,000 of margin. The market’s maximum leverage is 20x, so MMR is 2.5%. In the cross case the account also holds $3,000 of free collateral doing nothing else.
| Isolated | Cross | |
|---|---|---|
| Collateral backing the position | $5,000 | $8,000 |
| Maintenance margin rate | 2.5% | 2.5% |
| Liquidation price | 92,308 | 86,154 |
| Adverse move to reach it | 7.69% | 13.85% |
| Most you can lose on this trade | $5,000 | $8,000 |
The free $3,000 buys $6,153.85 of extra room in the price — the liquidation price drops from 92,308 to 86,154, and the move required to reach it widens from 7.69% to 13.85%. That is the case for cross.
The case against is in the bottom row. In isolated, $5,000 is the ceiling on what this trade can cost you, and that ceiling holds even if bitcoin does something genuinely stupid overnight. In cross, the $3,000 that widened your room is also $3,000 that is now in the fire — and if that collateral was quietly supporting a second and third position, the liquidation that eventually comes takes them in sequence. Run your own numbers through the liquidation calculator before you commit to either.
One thing the table hides: in cross the free-collateral figure is not a constant. Open anything else, take a loss anywhere else, or let funding settle against you, and the available balance changes and this liquidation price moves with it. The isolated number does not, until you deliberately move it.
Adjusting isolated margin
An isolated allocation is not frozen. You can add to it or take from it while the position is open, which is the lever that makes isolated workable rather than merely safe.source
- A positive adjustment moves free collateral into the position. More backing, a further-away liquidation price, same maintenance margin rate.
- A negative adjustment releases value out of the position and back to free collateral. The released value can include unrealised profit, which is why the signed allocation can fall to zero or go negative while the position is still perfectly solvent — its live equity is carrying it.
A signed allocation of zero does not mean an unbacked position; it means you have withdrawn exactly as much as you originally put in, and the position is now standing on profit. It is also a position with very little cushion left, because you removed the cushion.
Isolated vs cross: which one to use
The decision rule is about correlation, not caution.
| If you are | Use | Because |
|---|---|---|
| Running one directional trade | Isolated | There is nothing to net against, and the loss ceiling is free. |
| Running a hedge — long one thing, short a correlated thing | Cross | The winning leg genuinely supports the losing one. Isolated wastes that. |
| Sizing near the top of a market’s leverage ladder | Isolated | You want the blast radius fenced at one instrument. |
| Holding resting orders elsewhere that matter | Isolated | A cross liquidation cancels resting orders on every cross market. |
| Unsure | Isolated | It is the default, and the conservative one. |
Both scopes are evaluated independently against their own equity, so an account can run cross and isolated side by side and have exactly one of them break.source That is a real strategy, not a compromise: cross the book you want netted, isolate the trade you want fenced.
And whichever you choose, the trigger is the same one. Equity below maintenance margin — MarginRatio < 1.0, which means Equity < MM — measured against mark price, not the last print on the chart. Which price does the measuring matters more than the margin mode does.
Questions people ask
Is Polymarket Perps isolated or cross margin by default?
Isolated. The Polymarket web app opens new positions in isolated margin, where each position carries its own dedicated allocation of collateral. Cross margin is opt-in and configured through the API's leverage configuration, by setting crossMargin to true for an instrument.
How do I switch a Polymarket Perps position to cross margin?
Through the API's leverage configuration call — updateLeverage with crossMargin set to true for that instrument. It is a per-instrument setting, not an account-wide switch, and it only works on instruments that are not isolated-only. Every listed market currently permits cross, but the instruments endpoint carries an isolated_only flag per market, so check it.
Does cross margin lower my maintenance margin?
No. Maintenance margin is a flat per-market rate of 0.5 divided by the market's maximum leverage — 2.5% of notional on a 20x market, 5% on a 10x market — and it is identical in both margin modes, at every position size, at every leverage setting. What cross changes is the collateral standing behind the position, not the threshold that collateral has to stay above.
What happens to my other positions if one cross position is liquidated?
All of them are exposed. A cross liquidation is evaluated against the whole cross account: it blocks new orders on every market for the account, cancels resting orders on every cross market, and unwinds cross positions one at a time across successive cycles until equity recovers. An isolated liquidation, by contrast, closes only the affected position and blocks new orders only on that market.
Why is my isolated position's initial_margin changing when I have not touched it?
Because for an isolated position the API's initial_margin field reports the position's live equity, not a fixed requirement: signed allocation plus unrealised PnL minus settled funding, as a point-in-time snapshot. It moves whenever the mark price moves or funding settles. The field name is legacy — read it as the position's margin balance.
Can I take margin out of an isolated position?
Yes, by submitting a negative margin adjustment, which releases value out of the position's allocation and back to your free collateral. The released amount can include unrealised profit, so the signed allocation can fall to zero or go negative while the position remains solvent on its live equity. Adjustments are blocked while a cross liquidation is running or while that position is itself being liquidated.
Which is safer on Polymarket Perps, isolated or cross?
Isolated caps the blast radius at one position; cross reduces the chance of any single liquidation by letting unrealised profit on one position support margin on another. Isolated is the more conservative default because a bad trade cannot reach the rest of the account. Cross is the more capital-efficient choice for a hedged book, at the cost of correlating every position's fate.