Direct answer
In one-way mode a contract holds one direction, and an opposite order first reduces or closes the existing position; in hedge mode the long and the short are tracked separately and can exist together. Holding a 10,000 USDT long and a 10,000 USDT short in the same contract cancels the price risk, but opening them costs two taker fees totalling 10 USDT, and closing them another 10 USDT. Both Binance and OKX require every position closed and every order cancelled before the mode can be switched.
How the two modes work
In one-way mode (Binance's One-way Mode) a contract can hold a position in one direction only: selling while long first reduces the long, and turns into a short only once more is sold than was held. OKX's API documentation calls this net mode, in which orders open or close the position automatically according to their direction.
In hedge mode (Binance's Hedge Mode; long/short mode in OKX's API documentation) a contract can hold a long and a short at the same time, each with its own average entry, profit and loss and liquidation price, and every order must say whether it opens or closes a long or a short.
| Item | One-way | Hedge |
|---|---|---|
| Directions per contract | One | A long and a short together |
| An opposite order | Reduces or closes the position first | Opens a separate opposite position |
| Orders specify | Buy or sell | Open long, open short, close long, close short |
| PnL and average entry | One position, one average | Long and short each tracked separately |
One order, two different outcomes
Say you hold a 0.2 BTC long and place a 0.3 BTC sell order. In one-way mode it first closes the 0.2 BTC long and the remaining 0.1 BTC becomes a new short. In hedge mode, choosing to open a short leaves the 0.2 BTC long untouched and adds a separate 0.3 BTC short.
One-way mode reverses the direction; hedge mode leaves two positions open at once — a net exposure of 0.1 BTC short, but 0.5 BTC of positions carrying fees and margin.
Holding both sides does not cancel the costs
Holding a 10,000 USDT long and a 10,000 USDT short in the same contract cancels their profit and loss as the price moves, but the fees are charged on each: at a 0.05% taker fee, opening both costs 10 USDT and closing them another 10 USDT — 20 USDT round trip for a stretch of no exposure.
Funding is paid on one side and received on the other, so two positions of equal size cancel exactly on the same exchange. Margin is not halved by the hedge either: both positions tie up margin, and Binance states that in hedge mode the long and short notionals count together towards the tier limits.
When hedge mode is used
Typical cases are holding a long-term long while shorting a short-term pullback without touching the original position or its average, or a strategy that manages positions in both directions at once. Binance's own example holds a 1 BTC long and a 0.5 BTC short together, a net exposure of 0.5 BTC.
If the aim is only to reduce exposure, trimming in one-way mode is usually cheaper: reducing by 0.5 BTC pays one fee, instead of opening an opposite position and later closing both.
Liquidation in hedge mode
In isolated margin the long and the short each use their own margin and each has its own liquidation price. In cross margin, Binance's liquidation formula includes both sides, so a loss on one side moves the other's liquidation price.
Hedge mode makes the account look hedged, but if the two sides use different leverage or margin modes, one can still be liquidated first — breaking the hedge exactly when it matters.
Rules for switching modes
Binance states that the position mode cannot be changed while there are open positions or open orders, so close everything and cancel every order first; OKX's API documentation likewise requires no positions and no pending orders to switch.
Before switching, check that every contract's positions are closed and conditional, take-profit and stop-loss orders cancelled. Afterwards, change how you place orders too: in hedge mode each order must say whether it opens or closes, or you may open an unintended opposite position.
Official sources
The definitions of one-way and hedge mode, the switching rule and the example of a 1 BTC long with a 0.5 BTC short come from Binance's hedge mode documentation; the combined tier limits for longs and shorts from Binance's leverage and margin page; and OKX's net and long/short modes from OKX's API guide. Recorded 2026-10-07.
- Binance: What Is Hedge Mode and How to Use It?
- Binance: Leverage and Margin of USDⓈ-M Futures
- Binance: How to Calculate Liquidation Price of USDⓈ-M Futures Contracts
- OKX: API guide (position mode)
Keep reading
Frequently asked questions
Does hedge mode prevent liquidation?
No. With a long and a short open, the price risk cancels, but if either side runs short of margin it is still liquidated on its own, leaving the other position unhedged.
What happens to an opposite order in one-way mode?
It reduces the existing position first; only the amount beyond the position becomes a new position in the opposite direction.
How is the average entry worked out in hedge mode?
The long and the short are averaged separately and do not affect each other. Enter each side's fills separately in the average entry calculator.
Why do some trading tools require hedge mode?
Because a strategy may manage positions in both directions and needs to say explicitly whether an order opens or closes; in one-way mode an opposite order reduces the position directly, and the strategy's records stop matching. Read the tool's instructions before enabling it.