Margin Mode

Your Pluto futures accounts are margin accounts which allows you to trade assets like BTC on high leverage. An understanding of how margining works on Pluto vs. other exchange platforms is helpful to ensure behaviors are expected.

Intro to Margining

The intuitive understanding of trading futures is you are putting some amount of value ("initial margin") down as collateral and borrowing funds (e.g. USD if longing, borrowing BTC if shorting) to achieve a greater position size than you could without leverage.

In order for Pluto to be solvent, it needs to liquidate your position if the price moves against you. There needs to be a buffer which is why "maintenance margin" exists – once the remaining collateral falls below this threshold, your position will be closed.

Terminology	Definition	Formula
Initial Margin	Amount required to open a new position	(position_size * price) / max_leverage
Maintenance Margin Required	Amount required to maintain the position	0.5*initial_margin

Cross vs. Isolated

The simple mental framework is the risk is determined by the ratio of your open position size vs. your collateral amount. Your collateral amount is determined by whether your margin mode is cross or isolated.

In isolated margin, only the collateral allocated to a specific position is at risk—ideal for managing individual trade exposure. In cross margin, your available collateral is shared across all open positions, maximizing capital efficiency and reducing the chance of liquidation. You can switch modes depending on your risk preference and trading strategy.

Pluto defaults to isolated margin. This mode caps your loss to what you put into the position.

Type	Definition	At Liquidation Time
Cross	Uses your entire account value as collateral	You lose your entire account value
Isolated	Uses your specified collateral value	You lose what you put into the position

Position Example

Let's say you have $2,000 in your account and you open a long (buy) position on BTC with $1,000 at 5x leverage.

Attribute	Isolated	Cross
Direction	Long	Long
Collateral	$1,000	$2,000
Position Size	$5,000	$5,000
Liquidation Price	Higher	Lower
At Liquidation Time	You lose $1,000	You lose $2,000