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HEDGING


Our advanced trading technology allows you to limit your risks and lock your floating profit/loss by opening an opposite position of the equal volume which is called hedging.

 
Hedging is a strategy of minimizing investment risk caused by price fluctuation. A hedge consists of opening an offsetting position for an already purchased or sold asset of the same volume.

RISK MANAGEMENT TOOL

Hedging is a popular risk-management tool for experienced traders. It allows you to hold both long and short positions of equal volume for the same financial instrument simultaneously. This tool is generally used to limit losses during a ranging market or for unprofitable positions until the trader believes the market direction turns in their favour again.

Hedge advantages

Hedging allows traders to:

  • Work with different strategies simultaneously;
  • Manage investment risks with flexibility;
  • Survive hard market periods.

LOCKING PROFITS

Another purpose of using hedging is locking profits when the market makes a short-term move against the trader's already opened position. Opening position in the opposite direction for a short retracement during a long-term trend of the market allows traders to get more profit from the fluctuation market.

HEDGE MARGIN

Our trading terms allow you to hedge a position having only 50% of the required margin. Which means that to open a long GBP/USD position of 1 lot, while you already have a sell position of the same amount, it will require a 500 GBP margin instead of 1 000 GBP.

Important: applying hedging is not suitable for all traders and upon any market conditions. Opening of an equal position in the opposite direction and closing both positions with profit requires experience and full understanding of how hedging works and how to use it properly.

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