Hedge mode is a powerful feature designed for traders who want greater control over their risk management and trading strategies. By enabling hedge mode, you can simultaneously hold both long and short positions on the same futures contract—offering flexibility that’s especially valuable in volatile markets. Whether you're an experienced retail trader or managing institutional-level portfolios, understanding how to activate and use hedge mode can significantly enhance your trading efficiency.
This guide walks you through everything you need to know about hedge mode, its benefits, how to enable it on OKX, and best practices for using it effectively.
What Is Hedge Mode?
Hedge mode allows traders to maintain both long and short positions on the same derivative contract at the same time. Unlike one-way (or net) mode, where positions are netted against each other, hedge mode treats each position independently. This means you can open a long position and a short position on the same asset without either closing out the other.
This functionality is particularly useful for:
- Implementing advanced trading strategies
- Managing exposure during high market volatility
- Hedging existing positions without liquidating them
👉 Discover how hedge mode can improve your trading precision and risk control.
Why Use Hedge Mode?
Risk Management in Volatile Markets
Cryptocurrency and other financial markets can experience rapid price swings. In such environments, hedge mode acts as a strategic buffer. By holding offsetting long and short positions, traders can reduce downside risk while maintaining market exposure.
For example, if you hold a long-term long position but anticipate a short-term correction, opening a short position under hedge mode can help offset potential losses—without exiting your original trade.
Open Long and Short Positions on the Same Contract
One of the key advantages of hedge mode is the ability to open both directional positions on a single contract. This opens the door to sophisticated strategies such as:
- Arbitrage: Exploiting price differences between markets or contract types
- Market-neutral strategies: Balancing exposure to profit from volatility rather than direction
- Position scaling: Gradually building or reducing exposure based on market conditions
These tactics are difficult or impossible in one-way mode, where new trades automatically reduce or close existing positions.
Ideal for Advanced Hedging Strategies
Traders focused on portfolio protection often use hedge mode to balance their overall risk. For instance:
- A trader with a long BTC/USDT perpetual contract might open a short ETH/USDT position to balance sector exposure.
- During macroeconomic uncertainty, maintaining offsetting positions helps preserve capital while waiting for clearer market signals.
This flexibility supports dynamic risk adjustment without disrupting core investment theses.
How to Enable Hedge Mode on OKX
Enabling hedge mode is a straightforward process, whether you're using the OKX website or mobile app. Follow these steps carefully to ensure a smooth transition.
On the OKX Website
- Log in to your OKX account and navigate to Trade
- Select Futures from the trading options
- Click on the Settings icon (gear symbol) within the trading interface
- Locate Position Mode and select Hedge Mode
- Confirm your selection by clicking Apply or Confirm
Once enabled, you’ll see separate tabs for long and short positions in your futures trading panel.
In the OKX Mobile App
- Open the OKX app and go to Trade
- Tap into the Futures section
- Access Settings (usually found via the three-dot menu or gear icon)
- Find Position Mode and switch to Hedge Mode
- Confirm the change to apply it
After switching, you can begin placing independent long and short trades immediately.
⚠️ Important Notes:
- Hedge mode is only available for derivatives trading, including futures and perpetual swaps.
- You must not have any open positions when switching from one-way mode to hedge mode, as this could trigger forced liquidation.
- Consider reviewing your margin allocation and risk parameters after changing modes.
👉 Learn how professional traders use hedge mode to optimize entry and exit points.
Common Questions About Hedge Mode
Can I switch back from hedge mode to one-way mode?
Yes, but only if you have no open positions. Both transitions—hedge to one-way and one-way to hedge—require a clean slate with zero active trades.
Does hedge mode affect my margin usage?
Yes. Since each position (long or short) is treated independently, margin is allocated separately for each. This may require more available balance compared to one-way mode, where positions are netted.
Is hedge mode suitable for beginners?
While accessible to all users, hedge mode is best suited for traders with experience in derivatives and risk management. Misuse can lead to increased exposure or unintended losses.
Can I use leverage differently for long and short positions?
Absolutely. In hedge mode, you can set different leverage levels for each position, giving you granular control over risk per trade.
Does hedge mode work with all contract types?
It works with all futures and perpetual swap contracts on OKX, but not with spot trading or options.
Will my P&L be calculated separately?
Yes. Each position’s profit and loss (P&L) is tracked independently, making performance analysis more transparent and strategy-specific.
Final Thoughts: Maximize Flexibility with Hedge Mode
Hedge mode unlocks a new level of strategic depth in derivatives trading. By allowing simultaneous long and short positions, it empowers traders to:
- Protect gains without closing long-term positions
- React swiftly to market reversals
- Deploy complex, multi-leg strategies with precision
Whether you're hedging against macro risks or fine-tuning intraday trades, this feature enhances both safety and opportunity.
As markets evolve, so should your tools. Enabling hedge mode on OKX takes just a few clicks—but the impact on your trading resilience can be lasting.
👉 Start using hedge mode today and take full control of your trading strategy.