Leverage & Margin (Cross vs Isolated)

Leverage (what it means)

Leverage lets you control a larger position with less collateral. On Hyperswap, the initial margin required to open a position is:

$$ initialMargin = positionSize * markPrice/leverage $$

Higher leverage = less upfront margin, but you get liquidated faster if price moves against you.

Margin modes

Cross Margin (default)

With cross, your collateral is shared across all your cross positions for maximum capital efficiency.

Key behavior:

• PnL and collateral are pooled across cross positions
• A liquidation event in cross can impact your overall cross account (because it uses shared collateral)
• Important nuance: the actual liquidation price is independent of the leverage you set for cross positions (lower leverage just allocates more collateral).

Isolated Margin

With isolated, collateral is restricted to that single asset/position, so risk is compartmentalized. Liquidations in that isolated asset don’t affect your cross positions (and vice-versa).

Key behavior:

• You can add/remove margin after opening (unless the market is isolated-only)
• The liquidation price depends on the leverage you set (because leverage determines how much isolated margin is allocated).
• Isolated-only markets: same as isolated, but margin cannot be removed (it’s reduced proportionally as you close).

Practical guidance

• Use cross for capital efficiency across multiple positions.
• Use isolated when you want strict risk limits per trade (cleaner “max loss” boundaries).