Net Position Mode: One Direction per Instrument, and Opposite Orders Offset First
MC Markets uses net position rules: within one account, each instrument holds a position in one direction only. Using a 10-unit long as the example, this guide shows how opposite orders offset your position, how to flip direction and how margin is calculated.
MC Markets uses net position rules. Knowing how they work helps you avoid unexpected changes to your position after you place an order.
1. What Is a Net Position?
MC Markets uses net position mode. This means that within the same account, you only ever hold a position in one direction for each instrument.
If you buy and then sell, you will not end up holding two positions in opposite directions. In other words, hedged positions are not supported, and there is no option on the trading page to switch position mode.
2. Examples
Suppose you already hold a 10-unit long position in an instrument (a unit is whatever is shown next to Size in the order panel; for BTCUSDC, for example, it is the number of BTC). Whatever you do next, the system handles it as follows:
| Your order | What the system does | Position after the fill |
|---|---|---|
| Sell 4 units | Partial close | 6 units long remain |
| Sell 10 units | Full close | Position goes to zero |
| Sell 15 units | Closes the 10-unit long first, then opens a 5-unit short | 5 units short |
| Buy 3 units | Adds to the position | 13 units long |
An opposite order first offsets your existing position. Only if part of the order is left over does it become a position in the new direction.
3. How This Differs From Some Other Platforms
Some trading platforms allow hedging, meaning you can hold both a long and a short position on the same instrument at the same time. MC Markets does not support this.
There are three reasons for this design:
- Better capital efficiency: your margin is not tied up by long and short positions held side by side
- Lower risk: it reduces the sudden exposure that can arise when a hedge is unwound
- A clear position: there is always only one direction, so there is no confusion from long and short positions existing at the same time
4. Things to Note When Trading
- Before you place an order, Current Position at the top of the order panel shows the direction and size you already hold in that instrument
- Reducing and closing positions are not subject to order limits; you can do either at any time, as long as the market has an executable price
- If an opposite order is larger than your existing position, the excess opens a position in the new direction
- Margin is calculated only on the remaining net position
- If the position is fully offset, it goes to zero and no longer uses any margin
5. What This Means in Practice
If you hold a long position and want to go short on the same instrument, you cannot open a separate short to hedge it. Your sell order will first reduce your long position.
To flip your direction completely, you need to place an opposite order that is larger than your current position.
Further Reading
- Account Types: the Standard Account and the Plus Account
- A Guide to Trading Perpetual Contracts: Instruments, Specifications, Orders and Trading Hours, From Open to Close
- Margin and Leverage: Tiered Leverage, Liquidation and Leverage Limits by Market
Risk Warning
If an opposite order is larger than your existing position, the excess opens a position in the new direction, so check the direction and size before you place an order. Only use funds you can afford to lose.
Disclaimer
This article is for general informational and educational purposes only and may not apply to the regulations or products available in your region. It does not constitute investment, financial, or trading advice of any kind, nor an offer, solicitation, or recommendation to buy, sell, or hold any digital asset.
Trading digital assets involves high risk, prices can be extremely volatile, and you may lose all of your invested capital. Leveraged trading can result in losses exceeding your initial deposit. Past performance is not indicative of, and does not guarantee, future results.
You should make investment decisions independently based on your own financial situation and risk tolerance, and consult a licensed professional adviser where necessary. While we strive to ensure the accuracy of the information in this article, MC Markets accepts no liability for any errors or omissions, or for any loss you may suffer from using or relying on this information.