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Forex question What is hedging? How does hedging affect my margin requirement?
avatar Mymelody
Question by: Samanthar - 20 Sep 2016, 08:58:20
What is hedging? How does hedging affect my margin requirement?
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Answers (1)
avatar user 10833
Answer by: Joseph - 20 Sep 2016, 09:06:19

Hedging is when you have long and short positions in the same instrument open simultaneously. If you’re fully hedged, you will have long and short positions open in equal volumes. Having hedged positions will reduce your total margin requirement. For fully hedged positions no margin will be required. In case the market moves against your positions and your Equity falls below zero, your positions will be stopped out

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