Hedge mode allows traders to simultaneously hold both long and short positions in the same contract. This mode is useful for risk management, executing advanced trading strategies, and hedging existing positions without closing them.
Widely used by both institutional and experienced retail traders, hedge mode enhances risk management and adapts swiftly to changing market conditions—while maintaining multiple active positions within the same contract.
Why Should I Use Hedge Mode?
- Risk management in volatile markets: Hedge mode mitigates risks by holding opposing positions. In highly volatile markets, price swings can be unpredictable, and offsetting positions help cushion potential losses. This tool is ideal for traders seeking to protect investments while staying engaged during market fluctuations.
- Open long/short positions in the same contract: Traders can simultaneously open buy and sell positions, enabling complex strategies like arbitrage or market neutrality without closing existing positions.
- Offset potential losses: Traders often use hedge mode to balance portfolios. For example, if holding a long-term buy position but anticipating short-term price drops, opening a sell position offsets potential losses while preserving the long-term investment.
How to Enable Hedge Mode?
Follow these steps to activate hedge mode on OKX:
Web Instructions
- Navigate to Trade and select Futures Trading.
- Click Settings (gear icon) in the trading interface.
- Locate Position Mode and select Hedge Mode.
- Confirm by clicking Apply or Confirm.
Mobile App Instructions
- Go to Trade and access the futures trading section.
- Tap Settings.
- Find Position Mode and choose Hedge Mode.
- Confirm the changes.
Note:
- Hedge mode is only available for derivatives trading (futures and perpetual swaps).
- Switching from One-Way Mode to Hedge Mode requires no open orders to avoid forced liquidation.
- Trading strategies may need reconfiguration after changing position modes.
Enabling hedge mode offers greater flexibility in trade management, allowing effective hedging and advanced strategy execution.
👉 Master advanced hedging strategies
FAQ
Q1: Can I use hedge mode for spot trading?
A1: No, hedge mode is exclusive to derivatives (futures/perpetual contracts).
Q2: Does hedge mode prevent liquidation?
A2: It helps manage risk but doesn’t eliminate liquidation risks entirely. Ensure proper margin levels.
Q3: Are there fees for switching position modes?
A3: No, but existing positions must be settled before switching.
Q4: Can I run automated strategies in hedge mode?
A4: Yes, but ensure your algo-trading system supports dual-position logic.