> For the complete documentation index, see [llms.txt](https://docs.yellow.pro/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.yellow.pro/perpetual-trading/long-short-hedge-mode.md).

# Long, Short & Hedge Mode

In perpetual trading you can profit in both rising and falling markets by choosing your **position direction** — and, with hedge mode, hold both directions on the same pair at once.

## Going Long

When you **go long**, you're betting the price will **increase**. You profit if it rises and lose if it falls.

> **Example:** open a long on ETH-USDT at 2,000 with 10x leverage; ETH rises to 2,200 → your position gains 200 USDT per ETH, amplified by leverage relative to the margin used.

Simplified: `PnL = (Exit Price − Entry Price) × Position Size`. If the price falls far enough, the position is liquidated.

## Going Short

When you **go short**, you're betting the price will **decrease**. You profit if it falls and lose if it rises.

> **Example:** open a short on ETH-USDT at 2,000 with 10x leverage; ETH drops to 1,800 → your position gains 200 USDT per ETH.

Simplified: `PnL = (Entry Price − Exit Price) × Position Size`. Losses on a short are theoretically unlimited if the price keeps rising, so risk management is especially important.

|             | Long                 | Short                                 |
| ----------- | -------------------- | ------------------------------------- |
| Market view | Bullish (price up)   | Bearish (price down)                  |
| Profit when | Price rises          | Price falls                           |
| Loss when   | Price falls          | Price rises                           |
| Max loss    | Position size (100%) | Unlimited (price can rise infinitely) |

## One-Way vs Two-Way (Hedge) Mode

**Yellow\.pro currently uses Two-Way Mode (Hedge Mode) by default** — you can hold a **long and a short on the same pair simultaneously**, independently of each other.

**One-Way Mode** — where you hold only one direction per market, and opening the opposite side reduces or closes your existing position — **will be supported in a future update.**

![A long and a short position held on the same market at the same time in Two-Way (Hedge) Mode](/files/76ISdFrVI2CimYmxMATc)

|                           | One-Way Mode                     | Two-Way Mode                       |
| ------------------------- | -------------------------------- | ---------------------------------- |
| Long + short on same pair | Not allowed                      | Allowed                            |
| Opening opposite side     | Reduces/closes existing position | Creates a new independent position |
| Complexity                | Lower                            | Higher                             |
| Best for                  | Directional traders              | Hedging strategies                 |

### When to use hedge mode

* **Hedging a long** — open a short to offset a temporary decline without closing your long.
* **Strategy separation** — run a longer-term long and a short-term short, tracked separately.
* **Reducing directional bias** — test both sides and close whichever proves wrong.

{% hint style="info" %}
Each direction is an independent position with its own entry price, size, and PnL. In cross margin, both draw from the same balance. Hedge mode does **not** eliminate risk — both positions can lose in a choppy market.
{% endhint %}

## Related Articles

* [Margin & Leverage](/perpetual-trading/margin-and-leverage.md)
* [Understanding PnL](/perpetual-trading/pnl.md)
* [Risk & Liquidation](/perpetual-trading/risk-and-liquidation.md)