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  4. What Is Hedge Mode & Its Benefits?

What Is Hedge Mode & Its Benefits?

Hedge Mode is a function that is available when users Contract Trade on Phemex.

Typically, when users trade with One-Way Mode, positions will be open only in one direction – Long or Short. When users toggle into Hedge Mode, it allows you to keep a long and short position at the same time for your trading pair.

What is hedge mode used for then? Well, hedging is typically used to minimize the potential losses and protect the positions, regardless of what the market conditions are like. However, note that this does not mean that hedging is a 100% risk-free trading option.


Benefits of Using Hedge Mode

Here are some benefits of using hedge mode while contract trading:


  • Hedge mode allows users limit their losses

As mentioned briefly above, when a user hedges, it minimizes their losses and protects their positions. This serves as a huge advantage, especially in a market that is as fast moving as crypto!


  • Hedge mode demands for a lower margin outlay 

Hedging has an amazing advantage where it requires a lower margin outlay, which indirectly offers a flexible price mechanism. This is a great benefit for traders!


Check out Hedge Mode in real time on Phemex’s Contract Trading today. To learn more about how to use hedging, visit our User Guide on How Do I Use Hedge Mode?

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