How to Use Cross Margin on dYdX v4

Cross margin isn’t a setting you turn on, it’s what happens automatically the moment you deposit funds into dYdX, unless you specifically move collateral into an isolated subaccount instead.

This guide is part of TradeOnDEX’s dYdX how-to series within Perpetual Futures, and pairs directly with the liquidation worked-example guide.

Disclosure: TradeOnDEX may earn a commission from links to dYdX on this page, at no extra cost to you. Full details at the end of this article.

How cross margin works by default

Funds you deposit into dYdX Chain are added to your cross-margin account automatically. Your cross-margin balance settles liquidations for all positions on cross-margined markets, if you hold both a BTC-USD and an ETH-USD position, both draw on and are affected by the same shared collateral pool. As demonstrated in the liquidation worked example, this means one position’s margin requirement directly changes another’s liquidation price.

Isolated margin as the alternative

Isolated margin lets you allocate USDC to a specific market, ring-fencing it to cover liquidations for that position alone, without affecting positions funded by your cross-margin balance. This is useful specifically for managing liquidation risk in a volatile market you want contained, giving you more predictable, controlled collateral exposure for that one position.

How to move between cross and isolated margin, step by step

1. Your cross-margin balance lives in your primary subaccount (subaccount 0) by default.
2. To use isolated margin, move collateral from your cross subaccount into a separate subaccount with no open positions or orders.
3. Trade the specific market you want isolated using that dedicated subaccount’s allocated collateral.
4. When an isolated subaccount has zero open positions or orders remaining, its collateral automatically moves back to your cross subaccount.

Risk: what to actually weigh between the two modes

Cross margin’s shared pool means efficient capital use, but coupled risk across all your positions. Collateral isn’t siloed by market, so a strong position can effectively support a weaker one, convenient in normal conditions, but it also means a single bad position can draw down collateral that would otherwise cushion your other trades.

Isolated margin contains risk to one position, but at the cost of capital efficiency. Funds allocated to an isolated subaccount aren’t available to cushion your other cross-margined positions, even if those other positions could use the buffer, you’re trading flexibility for containment.

Switching between modes isn’t instantaneous or free of consideration. Moving collateral into or out of an isolated subaccount requires that subaccount to have zero open positions or orders, plan mode changes before you’re already deep into managing a position under time pressure, not during one.

The right choice depends on your specific situation, not a universal best practice. A trader running several unrelated, uncorrelated positions might prefer isolating a particularly volatile one to protect the rest of their account; a trader with a single, well-understood position might find cross margin’s capital efficiency the more practical default. Neither mode is objectively safer in every situation.

Cross margin vs. isolated margin, at a glance

See it for yourself

If you’re running multiple positions across unrelated markets, review whether isolating your most volatile position would meaningfully protect your other holdings, using the same liquidation-price logic covered in the worked example. You can review and adjust your margin mode at dydx.trade.

Frequently asked questions

Is cross margin the default on dYdX?

Yes, funds deposited into dYdX Chain go into your cross-margin account automatically unless you specifically allocate collateral to an isolated subaccount.

Does isolated margin protect my other positions if one position gets liquidated?

Yes, collateral allocated to an isolated subaccount only covers liquidations for that specific market’s position, without drawing on or affecting your cross-margined positions.

Can I switch a position from cross to isolated margin while it’s open?

Moving collateral into or out of an isolated subaccount requires that subaccount to have zero open positions or orders, plan the switch before you’re mid-position, not during one.

Which margin mode should I use?

It depends on your situation, cross margin offers better capital efficiency for positions you’re comfortable having interact with each other; isolated margin contains risk to a specific position at the cost of that capital’s flexibility elsewhere.

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TradeOnDEX may earn a commission if you sign up or trade through a link on this page, at no extra cost to you. dYdX’s own affiliate/referral terms are still being confirmed for this site, so links here are direct and untracked for now. This article is educational and is not financial advice. See our disclaimer for the full risk warning.