Hedging mode is a powerful feature that empowers traders to manage risk more effectively and execute advanced trading strategies. Whether you're navigating volatile markets or aiming to protect long-term positions from short-term fluctuations, understanding how to activate and use hedging mode can significantly enhance your trading flexibility. This guide walks you through everything you need to know—from what hedging mode is, to why it's beneficial, and exactly how to enable it on your OKX trading account.
What Is Hedging Mode?
Hedging mode allows traders to hold both long and short positions simultaneously on the same derivative contract. Unlike one-way (or net) mode, where positions offset each other, hedging mode treats each position independently. This means you can open a long and a short position on the same asset at the same time without either closing the other.
This functionality is especially valuable for risk management. It enables traders to hedge existing exposure, test different market scenarios, or implement complex strategies such as market-neutral trading or arbitrage—all within a single contract.
👉 Discover how hedging mode can boost your trading strategy today.
Why Use Hedging Mode?
There are several compelling reasons why traders—both institutional and experienced retail investors—choose to use hedging mode:
Risk Management in Volatile Markets
Market volatility can lead to unpredictable price swings. With hedging mode, traders can reduce downside risk by maintaining offsetting positions. For example, if you're bullish on an asset in the long term but anticipate near-term weakness, you can keep your long position open while opening a short position to profit from or protect against temporary drops.
This dual-position approach helps stabilize portfolio value during turbulent periods without forcing premature exits from strategic holdings.
Flexibility to Hold Opposing Positions
One of the standout features of hedging mode is the ability to open both long and short positions on the same contract. This opens the door to more sophisticated trading techniques, such as:
- Scalping with directional bias while maintaining a core position
- Pairs trading or arbitrage strategies
- Event-based hedging around earnings reports, macroeconomic data releases, or geopolitical events
Without hedging mode, traders would need to close one position before opening another in the opposite direction—limiting agility and potentially missing opportunities.
Ideal for Advanced Risk Mitigation Strategies
Professional traders often use hedging not just to avoid losses, but to fine-tune exposure. For instance, a trader holding a large long position in Bitcoin futures might open a smaller short position during a rally to lock in partial gains without exiting the main trade. This technique, known as "scaling out" or "partial hedging," preserves upside potential while reducing drawdown risk.
Hedging mode supports these nuanced approaches by allowing multiple active positions under one contract.
How to Enable Hedging Mode on OKX
Activating hedging mode on OKX is straightforward. Follow the steps below depending on whether you're using the web platform or the mobile app.
On Desktop (via Browser)
- Log in to your OKX account and navigate to the Trade section.
- Select Futures trading.
- In the trading interface, click on the Settings icon (gear symbol).
- Locate the Position Mode option and select Hedging Mode.
- Confirm your selection by clicking Apply or Confirm.
Once enabled, your account will support independent long and short positions across all supported derivatives.
On Mobile App
- Open the OKX mobile app and go to the Trade tab.
- Tap into the Futures market section.
- Access Settings from the top-right corner of the trading screen.
- Find Position Mode and switch it to Hedging Mode.
- Confirm the change when prompted.
After activation, you’ll gain full flexibility to manage multiple positions per contract.
Important Notes:
- Hedging mode is only available for derivative products, including futures and perpetual swap contracts.
- You must not have any open positions when switching from One-Way Mode to Hedging Mode, as this could trigger forced liquidation.
- After changing modes, review and adjust your trading strategies accordingly, as order execution and margin calculations may differ.
👉 Start using hedging mode to refine your risk control and strategy execution.
Frequently Asked Questions (FAQ)
Can I switch back from hedging mode to one-way mode?
Yes, you can switch back—but only if you have no open positions. The system requires all positions to be closed before allowing a mode change to prevent unintended liquidations or position merges.
Does hedging mode affect margin calculation?
Yes. In hedging mode, each position is treated separately for margin purposes. This means margin is allocated independently for long and short positions, even on the same contract.
Is hedging mode available for spot trading?
No. Hedging mode applies exclusively to futures and perpetual contracts. Spot trading does not support holding opposing positions since assets are bought and sold directly.
Will my existing orders be affected when I enable hedging mode?
If you enable hedging mode while having no open positions or pending orders, there will be no impact. However, if you attempt to switch with active orders or positions, the system will block the change until those are cleared.
Can I use automation or bots with hedging mode?
Absolutely. Many algorithmic traders leverage hedging mode for bot-based strategies like grid trading, mean reversion, or volatility arbitrage. Just ensure your bot logic accounts for independent position tracking.
Does hedging eliminate risk?
No—hedging reduces certain types of risk (like directional exposure), but introduces others (such as basis risk or timing mismatches). It should be used as part of a broader risk management framework, not as a standalone solution.
Final Thoughts
Enabling hedging mode unlocks a new level of strategic depth in derivative trading. By allowing simultaneous long and short positions, it gives traders greater control over risk exposure and more tools to adapt quickly to shifting market conditions.
Whether you're protecting gains, testing market reversals, or executing complex multi-leg strategies, hedging mode on OKX offers the flexibility professional traders demand.
👉 Unlock advanced trading capabilities—activate hedging mode now.
Remember: always ensure your account has no open positions before switching modes, and take time to understand how margin, P&L, and liquidation prices work under hedging mode to trade confidently and safely.