What is the Coin-M Futures Grid Bot?
Before understanding how the Hedging Strategy works, we recommend first reviewing the “Coin-M Futures Grid Bot” article to gain a general understanding of how the Pionex Coin-M Futures Grid Bot operates.
What is Hedging?
Hedging involves opening a COIN-M 1x short position (coin-backed) to sell crypto while preserving USD-denominated value, thereby safeguarding USD-based assets. For futures grid hedging, profits are generated through grid interval fluctuations:
Price drops: Earn more crypto by buying at lower intervals.
Price surges: Sell crypto at higher prices.
Simultaneously, you earn grid volatility arbitrage profits and funding rate revenue. With 1x leverage posing no liquidation risk, this strategy ensures stable value preservation and dual-profit potential. Its grid mechanism aligns with standard futures grids.
Partial Hedging vs Full Hedging
| Partial Hedging | Full Hedging |
Mechanism | Runs a Coin-M futures grid, automatically buying low and selling high within a set price range. Earns crypto as prices drop; sells at progressively higher prices during rallies. | Traditional hedging mode. Opens a full short position at the current price or a trigger price to immediately offset your exposure. |
Profit Sources | Grid arbitrage profits + Funding rate revenue | Funding rate revenue only |
Best For | Users who expect price to oscillate within a range and want to gradually accumulate crypto or sell at higher average prices. | Users who want immediate, full protection at the current price without active management. |
Key Features of Hedging
Profit in Bull & Bear Markets:
Bearish: Earn crypto as prices drop.
Bullish: Sell crypto at higher prices.
Grid Volatility Arbitrage – Profit from price fluctuations within grid intervals.
Funding Rate Revenue – Earn fees from maintaining short positions.
Zero Liquidation Risk – 1x leverage eliminates the risk of bankruptcy.
Which scenarios are suitable for the bot?
1. Selling Crypto
Suppose BTC is currently priced at $150,000 and you want to sell 1 BTC. There are two approaches depending on your outlook:
Option A: You believe this is the peak and want to sell immediately at the current price. Choose Full Hedging. Invest 1 BTC — regardless of whether the price rises or falls afterward, your asset value is locked in at $150,000, equivalent to selling at a fixed price. You also earn funding rate income on top.
Option B: You think the price will still fluctuate within a range and don't want to miss a higher exit. Choose Partial Hedging. Invest 1 BTC and set a price range (e.g., $130,000–$180,000). The bot will sell gradually at progressively higher prices, achieving an average exit above the current price. You also earn grid arbitrage profits and funding rate income.
Segmented hedging: If the current price is higher than the order price, sell the coins at a higher price, increasing the value denominated in USDT.
2. Holding Crypto While Earning More
If you want to continue holding your crypto but believe the price has peaked and is likely to drop, you can run a Hedging Bot to accumulate more crypto during the decline.
Choose your hedging type based on your market outlook:
Expecting a ranging/oscillating decline → Use Partial Hedging to earn grid arbitrage profits as the price moves within the range.
Expecting a sustained one-sided drop → Use Full Hedging for complete downside protection from the moment you open the position.
The current price is lower than the order price, so you can earn more coins.
How to Set Up a Coin-M Hedging Grid Bot Strategy?
To get started, simply follow the tutorials on the Coin-M Futures Grid Hedging strategy and create your first Hedging Bot today.
In APP：
Step 1: Open the Pionex app and click on [Bot] in the bottom menu bar, then click on [Create] - [Futures], where you will find the "Coin-M Futures Grid Bot" option.
Step 2: Once you are in the “Coin-M Futures Grid” section, you can select your preferred Coin-M Futures pair, then choose “Copy Strategy” and click on “Hedging”. The system will recommend corresponding AI strategies, allowing you to select your preferred option by clicking the [Copy bot] button.
Step 3: You can also choose “Customize” to manually set up your grid parameters and create a grid.
Step 4: After copying the strategy, enter your investment amount, and then click [Create] - [Confirm] to place your bot order.
How to Set Up a Hedging Bot Strategy?
In APP：
1. Robot - Create - Hedging Robot: Select the cryptocurrency you want to trade and, based on your investment strategy, choose to use segmented hedging or full-position hedging.
On the Web：
Step 1: Log in to your Pionex account, click on [Futures] in the top menu bar, then click on [Futures Bot], where you will find the "Coin-M Futures Grid" option.
Step 2: Once you are in the “Coin-M Futures Grid” section, you can select your preferred Coin-M Futures pair, then choose “Copy Strategy” and click on “Hedging”. The system will recommend corresponding AI strategies, allowing you to select your preferred option by clicking the [Copy bot] button.
Step 3: You can also choose “Customize” to manually set up your grid parameters and create a grid.
Step 4: After copying the strategy, enter your investment amount, and then click [Create] - [Confirm] to place your bot order.
Coin-M Hedging Grid Bot FAQ
Q: How does Hedging differ from standard contract grids?
A: Hedging uses COIN-M 1x short contracts as its core mechanism, sharing identical fees and operational logic with standard grids.
Q: How does Hedging differ from Arbitrage?
A: Arbitrage: Short perpetual futures while holding equivalent spot positions to profit solely from funding rates
Hedging: Combines COIN-M 1x shorts with grid trading, enabling profits from price drops (crypto gains), surges (USD gains), and funding rates.
Q: Is hedging better for bearish or bullish markets?
A: Both.
Bull Markets: Use hedging to lock in gains as prices peak or to exit gradually.
Bear Markets: Profit from falling prices.
Sideways Markets: Earn from funding rates and grid arbitrage.
Q: Can Hedging grids liquidate?
A: No. The 1x short position ensures zero liquidation risk.
Q: Do I lose money if prices keep rising?
A: Your USD-denominated balance increases as prices rise, but profits may lag behind holding/bullish strategies. For sustained rallies, consider futures grid longs for higher returns.
Q: My bot is running, but my USD-denominated value is still dropping. Is this normal?
A: Yes, this can be normal depending on market direction. The Hedging Bot's core mechanism is a Coin-M 1x short, designed to preserve your crypto quantity — not lock in your USD value. If the coin's price drops significantly, your USD-denominated balance may still decline even with hedging active. You can switch between "Coin-M Returns" and "USD Returns" views in the top-right corner of your bot order page to better understand your actual profit and loss.
Q: What happens when the price rises above the grid's upper limit?
A: When the price exceeds the upper limit, the bot pauses new trades. At this point, all crypto in the bot has been used to open equivalent short positions, so while your crypto quantity may show a floating loss, your USD-denominated value remains stable. The bot will automatically resume once the price returns within the range. If you expect prices to continue rising, you can adjust the upper limit (equivalent to restarting with a new range).
Q: What happens when the price falls below the grid's lower limit?
A: When the price drops below the lower limit, the bot closes all short positions and stops running. Your crypto holdings remain, but the bot can no longer hedge against further price drops. To continue hedging, you'll need to restart the bot or switch to Full Hedging mode for complete downside protection.
Q: Can I add funds or withdraw profits from a running bot?
A: Yes. You can add investment (top up) or withdraw realized profits (extra margin) from the bot order details page. Note that any withdrawn profits are finalized — if a floating loss occurs afterward, the withdrawn amount will not be clawed back, but your remaining margin level will decrease.
Q: What happens to my assets when I stop the bot?
A: When you close the bot, all contract positions are closed at market price. Your assets (including your original crypto and any realized grid profits) are returned to your Primary account. Funding fee income is settled in real time, and grid profits are finalized upon closing.
Please get in touch with Pionex Support if you have any other questions.