What is Hedge Mode?
Hedge mode is a trading strategy employed by futures traders to manage their risk exposure in the market. It entails opening two opposing positions—a long and a short—to capitalize on market movements while minimizing potential losses.
The difference between one-Way Mode and Hedge Mode
One-Way Mode:
In One-Way Mode, traders are limited to holding positions in only one direction per contract.
Hedge Mode:
In contrast, Hedge Mode allows traders to hold positions in both the long and short directions simultaneously under the same contract.
For instance, if a trader anticipates a downward price movement in the longer time frame and wishes to open a short position, but also seeks to open a long position for a shorter time frame, they would typically be unable to do so in One-Way Mode. Attempting to open positions in both directions would either cancel each other out or reduce their sizes.
However, in Hedge Mode, traders have the flexibility to maintain both long and short positions in the same contract concurrently. For example, traders can simultaneously hold long and short positions in the BTCUSDT contract.
How to switch between One-Way Mode and Hedge Mode?
Web
1. Navigate to the [Futures] trading interface, and click the settings icon at the top right.
2. Select [Position Mode]. You can select [One-way Mode] or [Hedge Mode], and then click [Confirm].
*Please note that Position Mode cannot be adjusted if you have open positions or open orders.
App
1. Tap [Futures] at the bottom of the homepage and click the settings icon at the top right.
2. Tap [Preferences].
3. Select [Position Mode]. You can select [One-way Mode] or [Hedge Mode], and then tap [Confirm] to complete the position mode selection.
*Please note that Position Mode cannot be adjusted if you have open positions or open orders.