The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Compared with Bitcoin spot transactions, Bitcoin contracts are more stable. Spot transactions are often affected by the price of Bitcoin. Bitcoin contracts not only have a short-selling profit mechanism, but also have a leverage mechanism that can amplify the rise and fall. An excellent trading tool for investors. But when it comes to contracts, one concept that has to be mentioned is hedging. Hedging is a trading strategy used by contract traders to reduce market risks. It can profit from market changes and reduce potential losses at the same time. How about Bitcoin contract hedging? Play? Next, the editor of Coin Circle will introduce specific tutorials to you.

## How to use Bitcoin contract hedging?

Bitcoin contract hedging is simply understood as going long or short on a contract. For example, if you open a short position, you expect the price to fall over a longer time frame, but you also want to open a long position over a shorter time frame.
You cannot open a position in two opposite directions at the same time. Opening a position in two opposite directions will cancel each other or reduce the position size.

In hedging mode, you can hold both long and short positions on the same contract at the same time. For example, you can hold both a long position and a short position in the BTC/USDT contract. The following is an introduction to the tutorial on playing with Bitcoin contract hedging:

1. Open (investors without an account can trade with an account), click [Asset Management] - [Fund Transfer] in the upper right corner

2. Select the currency, taking [USDT] as an example—from [Capital Account]—to [Trading Account]—enter the transfer [Amount]—[Confirm].

3. Click [Trading] - [Leverage] in the upper left corner of the official website homepage.

4. Click the settings icon in the upper right corner of the transaction page - [Transaction Settings] - select [Account Mode], [Transaction Unit] and other options to set up.

5. Take BTC/USDT margin trading as an example: select [Leverage] - [USDT] - [BTC/USDT].

6. Select [Cross Margin/Isolated Margin], [USDT Margin], [Leverage Multiple], [Limit Price Order] - Enter [Price], [Quantity] or [Amount] - Click [Buy (Long) BTC] -【confirm】.

7. Select [Cross Margin/Isolated Margin], [USDT Margin], [Leverage Multiple], [Limit Price Order] - Enter [Price], [Quantity] or [Amount] - Click [Sell (Short) BTC] - 【confirm】.

## Will Bitcoin contract hedging lead to liquidation?

Bitcoin contract hedging will lead to liquidation. There is a possibility of liquidation in any contract. Bitcoin contract hedging is a strategy to reduce risks by establishing relative positions on different markets or exchanges. The purpose of hedging is to reduce overall risk by having profits made in one position offset losses in another position. Although hedging can effectively reduce some risks, it is not completely risk-free.

If the Bitcoin market experiences significant volatility, the value of the hedging position may change significantly in a short period of time. If hedging is not timely or effective enough, it may result in losses or even liquidation.

If hedging uses leverage, which means borrowing money to increase the size of the position, the leverage itself increases risk. Price fluctuations can cause the value of a hedged position to decline rapidly, triggering a liquidation.

If the hedging involves opening a position on different exchanges, price differences or differences in trading conditions between the different exchanges may cause the hedge to become ineffective.

In illiquid markets, even small trades can have a significant impact on prices. Hedging positions may be difficult to close in a timely manner in the absence of sufficient liquidity.

If an error occurs in the hedging operation, such as miscalculating the position size or incorrect hedging ratio, losses may result.

All of the above is a tutorial answer to the question of how to hedge Bitcoin contracts. By using the hedging mode, you can reduce risks and minimize potential losses.
This is because your short position helps offset any losses on your long position. However, when hedging Bitcoin contracts, investors need to carefully manage risks, use appropriate leverage, regularly monitor market conditions, and take appropriate measures to avoid potential liquidation risks. At the same time, it is also crucial to understand the rules and trading conditions of different exchanges.