Question about margin in use when hedging | Forex Factory

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Question about margin in use when hedging

  • #1
  • First Post: Edited 6:19pm May 3, 2015 5:34pm | Edited 6:19pm
Alright folks, I don't hedge at all. Never have probably never will... but I do have a question for those of you with hedging experience.

If you had say:

1 Short Lot EURUSD
and
3 Long Lots EURUSD

"Margin Used" would then be calculated based off of the 2 Lot difference? If what I've stated is incorrect please do tell what is right

Thanks!
A Positive Mind, and Positive Spirit lead to True Happiness
  • #2
  • May 3, 2015 6:28pm May 3, 2015 6:28pm
Answer to my question, incase anyone is ever searching for it in the future:

Yes margin used is based off of the Lot Difference:

http://alpari.com/en/faq/trading_ter...hedged_margin/
A Positive Mind, and Positive Spirit lead to True Happiness
  • #3
  • May 3, 2015 6:57pm May 3, 2015 6:57pm
Actually - margin used is determined by the broker you use and different brokers have different rules with regard to hedging.

For instance - Gomarkets will actually calculate margin on the "outstanding" lots, meaning that, in the event you open a full hedge of, let's say 1 lot buy and 1 lot sell, then Margin used would be $0.

Most brokers however do calculate Margin Used as a percentage of total lots.
For instance, InstaForex charge 30% of total lots so, if I open 1 lot buy and 1 lot sell, they do keep 30% of the margin for 1 lot.

Naturally - Alpari has different rules yet again so, best is to find a broker to suit your particular needs.

Hope this is more clear.
  • #4
  • Last Post: May 4, 2015 12:18am May 4, 2015 12:18am
Quoting Jdpnz
Actually - margin used is determined by the broker you use and different brokers have different rules with regard to hedging. For instance - Gomarkets will actually calculate margin on the "outstanding" lots, meaning that, in the event you open a full hedge of, let's say 1 lot buy and 1 lot sell, then Margin used would be $0. Most brokers however do calculate Margin Used as a percentage of total lots. For instance, InstaForex charge 30% of total lots so, if I open 1 lot buy and 1 lot sell, they do keep 30% of the margin for 1 lot. Naturally - Alpari...

Thanks for the Clarification Much Appreciated!
A Positive Mind, and Positive Spirit lead to True Happiness
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