How to use the 'Hedge Mode' on Bybit? (Futures risk strategy)

Hedge Mode Overview

1. Hedge Mode allows traders to hold both long and short positions simultaneously on the same contract type within a single wallet.

2. Unlike One-Way Mode, where positions are netted automatically, Hedge Mode treats each position independently for margin calculation and liquidation risk.

3. This mode is especially useful for traders executing market-neutral strategies, arbitrage setups, or managing directional exposure without closing existing trades.

4. Bybit supports Hedge Mode across all USDT-margined and coin-margined perpetual and quarterly futures contracts.

5. Activation requires switching from One-Way Mode in the account settings—this action does not affect open positions but applies to all new entries thereafter.

Enabling Hedge Mode on Bybit

1. Log into your Bybit account via web or mobile application and navigate to the Futures trading interface.

2. Click the gear icon in the top-right corner of the trading panel to access Trading Settings.

3. Locate the Position Mode section and select Hedge Mode from the dropdown menu.

4. Confirm the change—Bybit will display a warning that this setting impacts how margin is allocated and how positions interact.

5. Once enabled, the position list displays separate Long and Short tabs, with independent entry prices, PnL, and margin usage shown for each side.

Risk Management Implications

1. Margin is calculated separately for long and short positions, meaning a losing long trade does not directly drain margin reserved for an unrelated short position.

2. Liquidation is assessed per position: if the isolated margin for a long falls below maintenance level, only that long is liquidated—not the entire portfolio.

3. Traders must monitor both sides individually; overlapping exposure can create hidden delta imbalance even when positions appear offset.

4. Funding payments accrue independently—holding both long and short incurs double funding cost unless positions are precisely matched in size and timing.

5. Stop-loss and take-profit orders function per-position, requiring explicit configuration for each direction rather than relying on net position triggers.

Practical Execution Example

1. A trader opens a long BTCUSDT perpetual at $62,400 with 10x leverage and 0.5 BTC equivalent size.

2. Later, anticipating short-term volatility, they open a short at $63,100 using the same contract, also at 10x leverage and identical notional value.

3. Both positions appear under separate tabs with distinct unrealized PnL, entry price, and margin utilization metrics.

4. If BTC drops to $61,800, the long shows loss while the short gains—yet neither affects the other’s margin buffer or liquidation threshold.

5. The trader may close either leg independently without triggering automatic netting or recalculating effective leverage on the remaining side.

Frequently Asked Questions

Q: Can I switch back to One-Way Mode while holding open positions in Hedge Mode?Yes, but Bybit requires all positions to be closed first. The system prevents mode switching until the position count reaches zero.

Q: Does Hedge Mode support cross-margin for futures?No. Hedge Mode operates exclusively with isolated margin per position. Cross-margin is disabled when Hedge Mode is active.

Q: Are trailing stop orders available in Hedge Mode?Yes. Trailing stops function per position and can be applied to either long or short entries independently.

Q: Do TP/SL orders in Hedge Mode trigger based on mark price or last traded price?They trigger based on the mark price by default, consistent with Bybit’s risk engine logic across all position modes.