What Is Hedge Mode?
Hedge mode allows traders to simultaneously hold both long and short positions on the same contract. This advanced trading feature is essential for:
- Risk management in volatile markets
- Executing sophisticated strategies (e.g., arbitrage, market-neutral trades)
- Protecting existing positions without closing them
Popular among institutional and experienced retail traders, hedge mode enhances flexibility by maintaining multiple active positions under one contract.
Why Use Hedge Mode?
1. Manage Risks in Volatile Markets
Hedge mode mitigates potential losses by balancing opposing positions. When price movements are unpredictable, this strategy compensates for downturns while allowing participation in upward trends.
2. Trade Long and Short Positions Simultaneously
Ideal for advanced strategies like:
- Arbitrage: Exploiting price differences across markets
- Hedging: Offsetting potential losses in primary positions
No need to close existing trades—adjust dynamically as market conditions change.
3. Optimize Portfolio Protection
Example: If holding a long-term long position but anticipating short-term dips, open a short position to minimize downside risk while preserving the core investment.
How to Enable Hedge Mode on OKX
Web Browser Instructions
- Navigate to Trade → Futures Trading.
- Click the Settings icon (gear symbol).
- Under Position Mode, select Hedge Mode.
- Confirm by clicking Apply.
Mobile App Instructions
- Open the app and go to Trade → Futures.
- Tap Settings.
- Choose Hedge Mode in the Position Mode section.
- Confirm the change.
👉 Master Hedge Mode Strategies
Key Considerations
- Availability: Only for derivatives (futures/perpetual swaps).
- Switching Modes: Close all open positions first to avoid forced liquidation.
- Strategy Adjustment: Reconfigure trading plans after enabling hedge mode.
FAQ
1. Can I use hedge mode for spot trading?
No, it’s exclusive to derivative markets.
2. Will hedge mode increase my profits?
It’s primarily for risk reduction, but skilled traders leverage it for strategic gains.
3. What happens if I switch modes with open positions?
Forced liquidation may occur—always close positions before changing modes.
4. Is hedge mode suitable for beginners?
Recommended for intermediate/advanced traders familiar with multi-position management.
👉 Explore OKX’s Advanced Trading Tools
Final Tips
Hedge mode unlocks precision in risk control and strategy execution. Regularly review market conditions and adjust positions to maximize its benefits.
For further insights, visit our trading strategies hub.