How to open a two-way position in HTX contracts? How to operate long-short hedging?

Learn to manage risk and boost profits with HTX's two-way positions and long-short hedging; open balanced long and short trades on correlated assets.

May 07, 2025 at 11:21 am

Opening a two-way position in HTX contracts and operating long-short hedging are advanced trading strategies that can help traders manage risk and potentially increase their profits. In this article, we will guide you through the process of setting up a two-way position and executing long-short hedging on the HTX platform.

Understanding Two-Way Positions and Long-Short Hedging

Before diving into the specifics of how to open a two-way position and operate long-short hedging, it's crucial to understand what these terms mean. A two-way position refers to simultaneously holding both long and short positions on the same asset. This strategy allows traders to profit from market movements in either direction. Long-short hedging, on the other hand, is a technique where a trader takes a long position in one asset and a short position in another related asset to hedge against potential losses.

Setting Up a Two-Way Position on HTX

To set up a two-way position on HTX, follow these steps:

• Log in to your HTX account: Ensure you have a verified account with sufficient funds to open the positions you want.
• Navigate to the futures trading section: Click on the "Futures" tab in the main menu to access the futures trading platform.
• Select the contract you want to trade: Choose the cryptocurrency contract you wish to trade. For example, if you want to trade Bitcoin, select the BTC/USDT contract.
• Open a long position: Click on the "Long" button to open a long position. Enter the amount you want to invest and set your leverage. For example, if you want to invest $1,000 with 10x leverage, enter $1,000 and select 10x leverage.
• Open a short position: Similarly, click on the "Short" button to open a short position. Enter the same amount and leverage as your long position. This will ensure that your two-way position is balanced.

Operating Long-Short Hedging on HTX

Long-short hedging on HTX involves taking opposing positions in correlated assets to mitigate risk. Here's how to do it:

• Identify correlated assets: Choose two assets that are highly correlated. For example, if you believe Bitcoin and Ethereum are correlated, you can use these two assets for your hedging strategy.
• Open a long position in one asset: Navigate to the futures trading section and select the contract for the asset you want to go long on. For example, if you want to go long on Bitcoin, select the BTC/USDT contract and click on the "Long" button. Enter the amount and leverage you want to use.
• Open a short position in the other asset: Go to the futures trading section and select the contract for the asset you want to go short on. For example, if you want to go short on Ethereum, select the ETH/USDT contract and click on the "Short" button. Enter the same amount and leverage as your long position.

Monitoring and Adjusting Your Two-Way Position and Long-Short Hedge

Once you have set up your two-way position and long-short hedge, it's essential to monitor and adjust them as needed. Here's how:

• Monitor market conditions: Keep an eye on market trends and news that could affect the prices of the assets you are trading. Use technical analysis tools provided by HTX to help you make informed decisions.
• Adjust your positions: If market conditions change, you may need to adjust your positions. For example, if the price of Bitcoin starts to rise significantly, you may want to increase your short position in Ethereum to maintain your hedge.
• Close positions: When you are ready to close your positions, navigate to the futures trading section and click on the "Close" button for each position. Enter the amount you want to close and confirm the transaction.

Managing Risk in Two-Way Positions and Long-Short Hedging

Managing risk is crucial when trading two-way positions and operating long-short hedging. Here are some tips to help you manage your risk:

• Use stop-loss orders: Set stop-loss orders for both your long and short positions to limit potential losses. For example, if you have a long position in Bitcoin, set a stop-loss order at a price level that you are comfortable with losing.
• Diversify your portfolio: Don't put all your eggs in one basket. Diversify your trading portfolio by trading multiple assets and using different strategies.
• Keep an eye on leverage: Be cautious with the amount of leverage you use. High leverage can amplify both profits and losses, so use it wisely.

Frequently Asked Questions

Q: Can I open a two-way position on HTX with different leverage for the long and short positions?

A: No, to maintain a balanced two-way position, you should use the same amount and leverage for both your long and short positions. Using different leverage levels can lead to an unbalanced position and increased risk.

Q: How do I know if two assets are correlated enough for long-short hedging?

A: To determine if two assets are correlated enough for long-short hedging, you can use historical price data and correlation analysis tools. HTX provides charts and technical analysis tools that can help you assess the correlation between different assets.

Q: What happens if the market moves against my two-way position and long-short hedge?

A: If the market moves against your positions, you may experience losses. To mitigate this risk, use stop-loss orders and monitor your positions closely. If the market moves significantly against your positions, you may need to adjust or close them to limit your losses.

Q: Can I use two-way positions and long-short hedging for day trading on HTX?

A: Yes, you can use these strategies for day trading on HTX. However, keep in mind that day trading involves high risk and requires close monitoring of market conditions. Ensure you have a solid understanding of the strategies and the market before using them for day trading.