Hedge mode (two-way positions)

Hedge mode lets an account hold a long leg and a short leg in the same market. This page describes how to enable it, place orders, and read the legs.

info

Active. The opt-in toggle, explicit per-side order routing, independent per-leg margin and dual-leg position reports are shipped. An account can switch to hedge mode while it is flat. It routes each order to an explicit leg with position_side. Each leg posts its own margin and reports as its own position object. Per-leg liquidation is partly in place. When an account is flagged for a forced close, the engine scans and scores both legs, and computes the deterministic close order (larger-maintenance leg first) identically on all validators. The per-leg close against the book is still rolling out. The default and recommended behaviour is still one-way: one net position per market.

Summary

By default, an account holds one net position per market (one-way). A buy while short reduces the position, then flips it. Hedge mode lets an account hold a long leg and a short leg in the same market at the same time. The engine tracks the two legs separately.

Hedge mode is opt-in per account, with no balance threshold. Any account can enable it. The account can change the mode only while it is flat on every market.

One-way and hedge

	One-way (default)	Hedge
Positions per market	1 net (signed)	up to 2 (a Long leg + a Short leg)
"Buy while short"	reduces, then flips the net position	reduces the Short leg only, or opens or extends the Long leg (you choose)
Order side selection	inferred from buy/sell	explicit position_side (long / short) required
Margin	one net requirement	each leg margined independently
Liquidation	one liquidation price	each leg scored on its own maintenance; deterministic close ordering in place, per-leg close emission rolling out
Reporting	one net position object	one object per non-zero leg (each labelled position_side)

The toggle, per-side routing, independent per-leg margin and dual-leg reports are active. Per-leg liquidation selection is in place. The per-leg close is still rolling out. See the status note above.

Enabling hedge mode

The position mode changes with a signed action. The action is valid only when the account is flat on every market.

// enable hedge mode (only legal when flat on ALL markets)
{ "type": "set_position_mode", "params": { "hedge": true } }

// back to one-way (also only when flat)
{ "type": "set_position_mode", "params": { "hedge": false } }

hedge is a boolean: true is hedge (two-way), false is one-way (the default). The flat-on-all-markets precondition is a safety rule. The node rejects a switch while the account holds any open position. The rejection is a clean no-op that changes nothing. A net position thus never becomes a stranded leg without notice. A request for the mode that the account already has, while flat, is a no-op success.

set_position_mode in the /exchange reference gives the request and response detail.

Placing orders in hedge mode

In hedge mode, every order must have an explicit position_side (long / short). A one-way account must not send position_side. A hedge account must send it. The field is on the submit_order order body, next to side, reduce_only and the other fields.

{
  "type": "submit_order",
  "order": {
    "owner": "0x...aa", "market": 0, "side": "bid",
    "kind": "limit", "size": 100000000, "limit_px": 5000000000,
    "tif": "gtc", "stp_mode": "cancel_oldest",
    "reduce_only": false,
    "position_side": "long"
  }
}

Intent	side	position_side	reduce_only
Open / add to long	bid	long	false
Reduce / close long	ask	long	true
Open / add to short	ask	short	false
Reduce / close short	bid	short	true

position_side is explicit and never inferred. If it were inferred, a buy meant to reduce a short could open or grow a long by mistake. The engine evaluates reduce_only against the named leg only. A reduce_only order on the short leg can never change the long leg.

Hedge mode has no flip. A close of the long leg never opens a short. That is a separate order against the short leg.

Margin

Each leg has independent margin. The long leg and the short leg each post their own initial and maintenance margin. The account requirement is the sum:

required_margin = initial_margin(long_leg) + initial_margin(short_leg)

This is deliberately conservative. A long plus a short in one market is delta-neutral in price, but each leg still uses margin. A future upgrade may give a netting credit for offsetting legs under portfolio margin. Until then, hold both legs only if you want separate exposures, for example different entry prices that you manage independently.

Each leg keeps its own margin mode. For example, the long leg can be isolated and the short leg cross.

Liquidation

When an account is flagged for a forced close, the engine scans both legs and scores each one by its own maintenance contribution. It then computes the deterministic close order through the standard tiered liquidation ladder. The leg with the larger maintenance goes first. On a tie, long goes before short. The order is identical on all validators. The per-leg close against the book is still rolling out. When it is active, the liquidation of one leg will not change the other.

Reporting

When hedge mode is on, the /info position reads return one position object per non-zero leg for a market with both legs. Each object has its side ("long" / "short"). A one-way account returns a single net position with no side field. Market-level open interest stays one net figure. Position rows are on clearinghouse_state. position_mode itself stays on account_state.

See also

• Margin modes: cross, isolated and strict-iso, applied per leg.
• Portfolio margin: where a future leg-netting credit would be.
• Tiered liquidation: per-leg ladders.
• /exchange reference: the wire format of the action.

FAQ

Show FAQ

Q: Do I have to use hedge mode? A: No. One-way (net) is the default and behaves as before. Hedge mode is opt-in only.

Q: Is there a minimum balance to enable it? A: No. Any account can switch on hedge mode while it is flat.

Q: Why can't I change the mode while I have an open position? A: The rule stops an existing net position from becoming an ambiguous, stranded leg. Close the position, then switch.

Q: Does a long and a short of equal size cost double margin? A: Yes. Each leg has independent margin, so an offsetting long and short use the margin of both legs. A netting credit for offsetting legs is a later enhancement, under portfolio margin.