My broker will hedge if I drop below my margin requirement:
eg:
I go long on USD/AUS and get a margin call
then, broker opens an opposite position, short (hedge?) to bring it back in line.
When my margin is more than sufficient again and pair swings my way, if I am holding on to them, do I just sell off the hedge? Just wondering it that is what I can do as the broker I use won't actually clean out an account until it has only $100 left in it.
This is all in my demo and I have been forcing a margin call to see how it all plays out with the messages etc. I have to admit I am still confused about hedging, but I think it means an opposite position is opened up in Forex
eg:
I go long on USD/AUS and get a margin call
then, broker opens an opposite position, short (hedge?) to bring it back in line.
When my margin is more than sufficient again and pair swings my way, if I am holding on to them, do I just sell off the hedge? Just wondering it that is what I can do as the broker I use won't actually clean out an account until it has only $100 left in it.
This is all in my demo and I have been forcing a margin call to see how it all plays out with the messages etc. I have to admit I am still confused about hedging, but I think it means an opposite position is opened up in Forex