diff --git a/src/vs/platform/native/common/native.ts b/src/vs/platform/native/common/native.ts
index d0643bd67e84f..baf14d9368dff 100644
--- a/src/vs/platform/native/common/native.ts
+++ b/src/vs/platform/native/common/native.ts
@@ -79,7 +79,7 @@ export interface ICommonNativeHostService {
 
 	handleTitleDoubleClick(): Promise<void>;
 
-	getCursorScreenPoint(): Promise<IPoint>;
+	getCursorScreenPoint(): Promise<{ readonly point: IPoint; readonly display: IRectangle }>;
 
 	isMaximized(): Promise<boolean>;
 	maximizeWindow(): Promise<void>;
diff --git a/src/vs/platform/native/electron-main/nativeHostMainService.ts b/src/vs/platform/native/electron-main/nativeHostMainService.ts
index 0929f47ea05d5..88ec38a27879c 100644
--- a/src/vs/platform/native/electron-main/nativeHostMainService.ts
+++ b/src/vs/platform/native/electron-main/nativeHostMainService.ts
@@ -208,8 +208,11 @@ export class NativeHostMainService extends Disposable implements INativeHostMain
 		window?.handleTitleDoubleClick();
 	}
 
-	async getCursorScreenPoint(windowId: number | undefined): Promise<IPoint> {
-		return screen.getCursorScreenPoint();
+	async getCursorScreenPoint(windowId: number | undefined): Promise<{ readonly point: IPoint; readonly display: IRectangle }> {
+		const point = screen.getCursorScreenPoint();
+		const display = screen.getDisplayNearestPoint(point);
+
+		return { point, display: display.bounds };
 	}
 
 	async isMaximized(windowId: number | undefined): Promise<boolean> {
diff --git a/src/vs/workbench/browser/parts/editor/editorTabsControl.ts b/src/vs/workbench/browser/parts/editor/editorTabsControl.ts
index e0aa447bc61ba..62c3b1e19aaea 100644
--- a/src/vs/workbench/browser/parts/editor/editorTabsControl.ts
+++ b/src/vs/workbench/browser/parts/editor/editorTabsControl.ts
@@ -331,27 +331,32 @@ export abstract class EditorTabsControl extends Themable implements IEditorTabsC
 		targetGroup.focus();
 	}
 
-	protected async maybeCreateAuxiliaryEditorPartAt(e: DragEvent, offsetElement?: HTMLElement): Promise<IAuxiliaryEditorPart | undefined> {
-		const cursorLocation = await this.hostService.getCursorScreenPoint() ?? { x: e.screenX, y: e.screenY };
+	protected async maybeCreateAuxiliaryEditorPartAt(e: DragEvent, offsetElement: HTMLElement): Promise<IAuxiliaryEditorPart | undefined> {
+		const { point, display } = await this.hostService.getCursorScreenPoint() ?? { point: { x: e.screenX, y: e.screenY } };
 		const window = getWindow(e);
-		if (cursorLocation.x >= window.screenX && cursorLocation.x <= window.screenX + window.outerWidth && cursorLocation.y >= window.screenY && cursorLocation.y <= window.screenY + window.outerHeight) {
+		if (point.x >= window.screenX && point.x <= window.screenX + window.outerWidth && point.y >= window.screenY && point.y <= window.screenY + window.outerHeight) {
 			return; // refuse to create as long as the mouse was released over main window to reduce chance of opening by accident
 		}
 
-		let offsetX = 0;
-		let offsetY = 30; // take title bar height into account (approximation)
+		const offsetX = offsetElement.offsetWidth / 2;
+		const offsetY = 30/* take title bar height into account (approximation) */ + offsetElement.offsetHeight / 2;
 
-		if (offsetElement) {
-			offsetX += offsetElement.offsetWidth / 2;
-			offsetY += offsetElement.offsetHeight / 2;
-		}
+		const bounds = {
+			x: point.x - offsetX,
+			y: point.y - offsetY
+		};
 
-		return this.editorGroupService.createAuxiliaryEditorPart({
-			bounds: {
-				x: cursorLocation.x - offsetX,
-				y: cursorLocation.y - offsetY
+		if (display) {
+			if (bounds.x < display.x) {
+				bounds.x = display.x; // prevent overflow to the left
 			}
-		});
+
+			if (bounds.y < display.y) {
+				bounds.y = display.y; // prevent overflow to the top
+			}
+		}
+
+		return this.editorGroupService.createAuxiliaryEditorPart({ bounds });
 	}
 
 	protected isNewWindowOperation(e: DragEvent): boolean {
diff --git a/src/vs/workbench/services/auxiliaryWindow/browser/auxiliaryWindowService.ts b/src/vs/workbench/services/auxiliaryWindow/browser/auxiliaryWindowService.ts
index e2a1c27421189..e06a85028a0ce 100644
--- a/src/vs/workbench/services/auxiliaryWindow/browser/auxiliaryWindowService.ts
+++ b/src/vs/workbench/services/auxiliaryWindow/browser/auxiliaryWindowService.ts
@@ -202,8 +202,8 @@ export class BrowserAuxiliaryWindowService extends Disposable implements IAuxili
 		const height = options?.bounds?.height ?? BrowserAuxiliaryWindowService.DEFAULT_SIZE.height;
 
 		const bounds: IRectangle = {
-			x: Math.max(options?.bounds?.x ?? (activeWindow.screen.availWidth / 2 - width / 2), 0),
-			y: Math.max(options?.bounds?.y ?? (activeWindow.screen.availHeight / 2 - height / 2), 0),
+			x: options?.bounds?.x ?? (activeWindow.screen.availWidth / 2 - width / 2),
+			y: options?.bounds?.y ?? (activeWindow.screen.availHeight / 2 - height / 2),
 			width: Math.max(width, WindowMinimumSize.WIDTH),
 			height: Math.max(height, WindowMinimumSize.HEIGHT)
 		};
diff --git a/src/vs/workbench/services/host/browser/browserHostService.ts b/src/vs/workbench/services/host/browser/browserHostService.ts
index 6e198baa33e1d..f2d402899fc35 100644
--- a/src/vs/workbench/services/host/browser/browserHostService.ts
+++ b/src/vs/workbench/services/host/browser/browserHostService.ts
@@ -9,7 +9,7 @@ import { InstantiationType, registerSingleton } from 'vs/platform/instantiation/
 import { ILayoutService } from 'vs/platform/layout/browser/layoutService';
 import { IEditorService } from 'vs/workbench/services/editor/common/editorService';
 import { IConfigurationService } from 'vs/platform/configuration/common/configuration';
-import { IWindowSettings, IWindowOpenable, IOpenWindowOptions, isFolderToOpen, isWorkspaceToOpen, isFileToOpen, IOpenEmptyWindowOptions, IPathData, IFileToOpen, IPoint } from 'vs/platform/window/common/window';
+import { IWindowSettings, IWindowOpenable, IOpenWindowOptions, isFolderToOpen, isWorkspaceToOpen, isFileToOpen, IOpenEmptyWindowOptions, IPathData, IFileToOpen } from 'vs/platform/window/common/window';
 import { isResourceEditorInput, pathsToEditors } from 'vs/workbench/common/editor';
 import { whenEditorClosed } from 'vs/workbench/browser/editor';
 import { IWorkspace, IWorkspaceProvider } from 'vs/workbench/browser/web.api';
@@ -502,7 +502,7 @@ export class BrowserHostService extends Disposable implements IHostService {
 		// There seems to be no API to bring a window to front in browsers
 	}
 
-	async getCursorScreenPoint(): Promise<IPoint | undefined> {
+	async getCursorScreenPoint(): Promise<undefined> {
 		return undefined;
 	}
 
diff --git a/src/vs/workbench/services/host/browser/host.ts b/src/vs/workbench/services/host/browser/host.ts
index a84d70ab0dca7..2b13e2aa3f754 100644
--- a/src/vs/workbench/services/host/browser/host.ts
+++ b/src/vs/workbench/services/host/browser/host.ts
@@ -5,7 +5,7 @@
 
 import { Event } from 'vs/base/common/event';
 import { createDecorator } from 'vs/platform/instantiation/common/instantiation';
-import { IWindowOpenable, IOpenWindowOptions, IOpenEmptyWindowOptions, IPoint } from 'vs/platform/window/common/window';
+import { IWindowOpenable, IOpenWindowOptions, IOpenEmptyWindowOptions, IPoint, IRectangle } from 'vs/platform/window/common/window';
 
 export const IHostService = createDecorator<IHostService>('hostService');
 
@@ -87,9 +87,9 @@ export interface IHostService {
 	moveTop(targetWindow: Window): Promise<void>;
 
 	/**
-	 * Get the location of the mouse cursor or `undefined` if unavailable.
+	 * Get the location of the mouse cursor and its display bounds or `undefined` if unavailable.
 	 */
-	getCursorScreenPoint(): Promise<IPoint | undefined>;
+	getCursorScreenPoint(): Promise<{ readonly point: IPoint; readonly display: IRectangle } | undefined>;
 
 	//#endregion
 
diff --git a/src/vs/workbench/services/host/electron-sandbox/nativeHostService.ts b/src/vs/workbench/services/host/electron-sandbox/nativeHostService.ts
index 77cadf301b426..c8e8e38af3240 100644
--- a/src/vs/workbench/services/host/electron-sandbox/nativeHostService.ts
+++ b/src/vs/workbench/services/host/electron-sandbox/nativeHostService.ts
@@ -9,7 +9,7 @@ import { INativeHostService } from 'vs/platform/native/common/native';
 import { InstantiationType, registerSingleton } from 'vs/platform/instantiation/common/extensions';
 import { ILabelService, Verbosity } from 'vs/platform/label/common/label';
 import { IWorkbenchEnvironmentService } from 'vs/workbench/services/environment/common/environmentService';
-import { IWindowOpenable, IOpenWindowOptions, isFolderToOpen, isWorkspaceToOpen, IOpenEmptyWindowOptions, IPoint } from 'vs/platform/window/common/window';
+import { IWindowOpenable, IOpenWindowOptions, isFolderToOpen, isWorkspaceToOpen, IOpenEmptyWindowOptions, IPoint, IRectangle } from 'vs/platform/window/common/window';
 import { Disposable } from 'vs/base/common/lifecycle';
 import { NativeHostService } from 'vs/platform/native/common/nativeHostService';
 import { INativeWorkbenchEnvironmentService } from 'vs/workbench/services/environment/electron-sandbox/environmentService';
@@ -153,7 +153,7 @@ class WorkbenchHostService extends Disposable implements IHostService {
 		return this.nativeHostService.moveWindowTop(isAuxiliaryWindow(targetWindow) ? { targetWindowId: targetWindow.vscodeWindowId } : undefined);
 	}
 
-	getCursorScreenPoint(): Promise<IPoint> {
+	getCursorScreenPoint(): Promise<{ readonly point: IPoint; readonly display: IRectangle }> {
 		return this.nativeHostService.getCursorScreenPoint();
 	}
 
diff --git a/src/vs/workbench/test/electron-sandbox/workbenchTestServices.ts b/src/vs/workbench/test/electron-sandbox/workbenchTestServices.ts
index 346b4d36cdc09..5d8f3ada4d36a 100644
--- a/src/vs/workbench/test/electron-sandbox/workbenchTestServices.ts
+++ b/src/vs/workbench/test/electron-sandbox/workbenchTestServices.ts
@@ -96,7 +96,7 @@ export class TestNativeHostService implements INativeHostService {
 	async unmaximizeWindow(): Promise<void> { }
 	async minimizeWindow(): Promise<void> { }
 	async moveWindowTop(options?: INativeOptions): Promise<void> { }
-	getCursorScreenPoint(): Promise<IPoint> { throw new Error('Method not implemented.'); }
+	getCursorScreenPoint(): Promise<{ readonly point: IPoint; readonly display: IRectangle }> { throw new Error('Method not implemented.'); }
 	async positionWindow(position: IRectangle, options?: INativeOptions): Promise<void> { }
 	async updateWindowControls(options: { height?: number; backgroundColor?: string; foregroundColor?: string }): Promise<void> { }
 	async setMinimumSize(width: number | undefined, height: number | undefined): Promise<void> { }