Margin Modes
This section explains all risk management mechanisms on Rails in detail.
You can find all calculations detailed in our Trading Metrics guide here.
Rails supports two margin modes: Cross-Margin (default) and Isolated Margin, each with its own collateral pool and liquidation mechanics:
In cross-margin mode, your entire cross-margin equity acts as shared collateral across all cross margin positions. Unrealized profits from one position can help support another, but deterioration in any position affects the entire account’s health.
Because unrealized P&L fluctuates in real-time with the market, your cross-margin equity is continuously updated. Additionally, any positions in isolated margin mode are excluded from the cross-margin pool.
In isolated margin mode, each position has its own dedicated margin pool. The collateral allocated to an isolated position is used exclusively for that position and has no effect on cross margin positions or other isolated positions.
When creating or increasing an isolated position, the order margin is added to the Isolated Position Margin and is therefore excluded from your Cross-Margin balance.
When partially closing an isolated position, the same proportion of margin is released back to your Cross-Margin Balance, and the realized P&L from the closed portion is also added to Cross-Margin Balance.
Increasing leverage increases risk by scaling down your Initial margin requirement (freeing up order margin in cross-margin and reducing upfront capital allocation in isolated margin) but directly compresses your risk buffer by amplifying both your potential returns and your sensitivity to adverse price movements.
Adjusting Isolated Position Margin:
Once a position is open in isolated margin mode, you can manually add or remove margin to tune the position’s risk profile.
Adding Margin
To add additional margin to your open isolated position, first find the pen icon 
as shown below.
You'll be defaulted to the Increase margin modal. Entering an amount will display summary information about how your position margin, account margin, and more importantly your liquidation price, will change.
Select the Increase Margin button when you're ready to proceed.
Once completed, your position will update accordingly:
Available margin changes as the market moves. If you select 100%, you may need to adjust the amount or select 100% again if the market moves against you.
Increasing margin on an isolated-margin position decreases its risk of liquidation, but may increase the risk of liquidation on any cross-margin positions. This is because the margin is taken from your cross-margin equity which impacts your cross-margin ratio.
Removing Margin
When decreasing additional margin from a position, the modal will show you any margin amount that is available to remove from your isolated position.
Select the Decrease Margin button when you're ready to proceed, and your position will be updated accordingly.
The required margin floor ensures the position retains enough collateral to remain open at its current leverage.
Removing margin decreases isolated position equity and moves the liquidation price closer to the current market price. Always verify the updated liquidation price before confirming changes, and use with caution.
Adjusting Leverage
Leverage allows you to control larger notional positions with less upfront capital. Increasing leverage scales down your initial margin requirements across both margin modes, amplifying both your potential returns and your sensitivity to adverse price movements.
On Rails, leverage is selectable up to 5x and is configured per market:
To adjust your leverage multiplier for a specific market, use the leverage selector located within the order panel:
Adjusting the leverage multiplier is only available through the order panel, and only for that specific market.
Increasing leverage on an isolated position lowers your required margin, which increases excess margin. The released margin is not automatically returned to cross-margin balance; it remains in isolated position margin until you explicitly remove it. Decreasing leverage has the opposite effect — it raises your required margin.
Increasing leverage brings the liquidation price closer to the current market price. Always verify the updated liquidation price before confirming changes, and use with caution.
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