• Hold buy and sell positions in the same currency pair at the same time
  • Enter the market without choosing a direction for the currency pair
  • Opening two positions requires margin for only one position

Hedging is an advanced feature of FXCM's No Dealing Desk Forex Execution system. Hedging is enabled on all live and demo accounts, with the exception of JPY-denominated accounts.

How to Set Up a Hedged Trade

Hypothetical example of hedging a position.

Simply buy or sell a currency pair, then do the opposite. For example: buy 1 lot of EUR/USD:

Buy Order

Then, sell 1 lot of EUR/USD:

Sell Order

Now you have a hedged trade in EUR/USD. You can see in the "S/B" column the one position that you bought and the one that you sold. If the EUR/USD rises, you have a profit in the buy position and a loss in the sell position. If it falls, the exact opposite applies.

Hedging Accounts

You can see your required margin in the "Usd Mr" column in the "Accounts" window. You are holding 2 lots of EUR/USD, but since this is an evenly hedged trade (1,000 Short; 1,000 Long), you are not required to set aside any used margin and you will see an increase in your usable margin.

What is the margin requirement for maintaining a hedged position?

FXCM does not require margin on hedged positions. This means that you will see an increase in your usable margin when you enter a hedge. Please note that while additional margin will temporarily be made available, you will ultimately be required to put up the original margin when you close out one side of your hedge. It is important to verify that you have enough usable margin available before you close out of a hedge. In rare cases, the additional margin requirement could trigger a margin call on your account.

How to Close a Hedged Trade?

Simply use a close, stop, or limit order as you would with any other trade. Each of the buy and sell positions needs to be closed separately.

When Should You Use Hedging?

Watch this video for an example of how to use hedging to trade in a range-bound market.

Can Hedging Be Turned Off?

Yes, hedging is an optional feature on live accounts. To disable hedging on your live FXCM account, simply contact us.
Click here for our contact information.

While the ability to hedge is an appealing feature, traders should be aware of the various factors that can affect their accounts. Spreads may widen, causing margin to diminish, potentially leading to the danger of a margin call. Pip costs and rollover may also cause a decrease in account equity, adversely effecting hedged positions. For more information about hedging strategies associated with the FXCM No Dealing Desk Forex Execution platform, please contact one of our sales representatives.