> For the complete documentation index, see [llms.txt](https://docs.carbon.inc/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.carbon.inc/developers/architecture/accounts-and-trading-modes.md).

# Accounts & trading modes

Carbon's account model has one more level than a typical exchange. Get it right and balances, permissions, and isolation all fall into place.

### The three levels

```mermaid
flowchart TD
    W["Account (your wallet)"] --> S1["Subaccount (PartyA)"]
    W --> S2["Subaccount (PartyA)"]
    S1 --> P1["Cross positions<br/>(shared margin)"]
    S2 --> VA1["Virtual Account → isolated position"]
    S2 --> VA2["Virtual Account → isolated position"]
```

| Level                    | Identifier          | What it is                                                                            |
| ------------------------ | ------------------- | ------------------------------------------------------------------------------------- |
| **Account**              | wallet address      | Your owner identity — the wallet that signs in. Holds no positions itself.            |
| **Subaccount**           | `subaccountAddress` | An on-chain **PartyA**. **Positions live here.** One wallet can own many.             |
| **Virtual Account (VA)** | VA address          | A margin-**isolated** container inside a subaccount, for isolated (tradfi) positions. |

Almost every trading and balance endpoint takes a **`subaccountAddress`**, not your wallet — the wallet authorizes, the subaccount trades.

Discover accounts with `GET /v1/accounts/subaccounts`, balances with `/v1/accounts/subaccount/balance`, and isolated VAs with `/v1/accounts/subaccount/isolated-vas`.

### Crypto vs tradfi

A subaccount trades in one mode, which fixes the margin model and which positions are allowed:

|           | **Crypto**                                         | **TradFi**                                      |
| --------- | -------------------------------------------------- | ----------------------------------------------- |
| Margin    | **Cross** — one shared pool backs all positions    | **Isolated** — each position has its own margin |
| Allowed   | **Cross only**                                     | **Isolated only**                               |
| Container | Subaccount                                         | Virtual Account per position/group              |
| Risk      | Shared; liquidation considers the whole subaccount | Ring-fenced per VA                              |

> Hard rule today: crypto = only cross, tradfi = only isolated. No mixing.

#### Cross (crypto)

All positions draw from the shared pool. Open one by simply *not* isolating:

```jsonc
POST /v1/trade/create-position
{ "subaccountAddress": "0x…", "chainId": 42161, "marketId": 1,
  "positionType": "LONG", "orderType": "MARKET", "quantity": 1, "leverage": 10 }
```

#### Isolated (tradfi)

Each position gets its own VA with dedicated margin:

```jsonc
POST /v1/trade/create-position
{ "subaccountAddress": "0x…", "chainId": 42161, "marketId": 1,
  "positionType": "LONG", "orderType": "MARKET", "quantity": 1, "leverage": 10,
  "isolate": true, "isolationType": "POSITION" }
```

`isolationType` groups risk by `POSITION`, `MARKET`, `MARKET_LONG`, or `MARKET_SHORT`. The VA is funded from its parent subaccount's **free balance**; move margin with `POST /v1/trade/add-margin` and `/remove-margin`.

### Allocated vs free balance

A subaccount's collateral sits in one of two buckets:

| Bucket                 | Field              | What it's for                                                              |
| ---------------------- | ------------------ | -------------------------------------------------------------------------- |
| **Allocated**          | `allocatedBalance` | The **cross** margin pool. Counts toward equity and backs cross positions. |
| **Free (deallocated)** | `freeBalance`      | Uncommitted collateral. This is what **isolated** VAs are funded from.     |

Deposits default to the bucket that matches the subaccount's mode:

* **Crypto** deposits land in the **allocated** balance — ready for cross trading.
* **TradFi** deposits land in the **free (deallocated)** balance — ready to fund isolated positions.

Move funds between the two with the Instant Layer collateral endpoints:

```jsonc
// free → allocated: make funds usable as cross margin
POST /v1/instant-layer/allocate
{ "subaccountAddress": "0x…", "chainId": 42161, "amountWei": "1000000000000000000" }

// allocated → free: make funds available for isolated positions
POST /v1/instant-layer/deallocate
{ "subaccountAddress": "0x…", "chainId": 42161, "amountWei": "1000000000000000000" }
```

Amounts are collateral wei (1e18) as decimal strings. `allocate` requires the `OPEN_POSITION` permission, `deallocate` requires `CLOSE_POSITION`. Deallocating is solvency-checked (the API obtains the required signature for you), so it fails if it would leave open cross positions under-margined. Both execute through the Instant Layer, so the subaccount must be enabled for API access first — see [Enabling API access](/developers/http-api/enabling-api-access.md).

### Trading a subaccount over the API

Owning a subaccount isn't enough — it must be enabled for API access and your API key must be granted permissions before it can trade. This one-time setup (via the Carbon app or the API) is covered in its own page: [Enabling API access](/developers/http-api/enabling-api-access.md).


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