Exness Hedging

Exness officially permits hedging, so you can enjoy a variety of trading strategies that utilize this approach. Hedging is an effective trading method for limiting losses caused by sudden market fluctuations while aiming to profit from exchange rate gains and swap points.However, depending on the method and timing, hedging can potentially result in significant losses for both the trader and the FX broker; as a result, most brokers either prohibit hedging or have detailed rules and prohibited practices in place. If you engage in trading that constitutes a prohibited activity, your account may be frozen or suspended, so it is essential to thoroughly review the terms and conditions regarding hedging.

Please note that Exness does not impose any specific rules or restrictions on hedging. You can experience dynamic trading using Exness’s high leverage of up to 2,000x (*), while avoiding increased losses due to price fluctuations through hedging.

A hedged trade is a trading strategy in which you simultaneously hold both a “long” and a “short” position in the same currency pair. Since hedged trades result in unrealized losses and gains offsetting each other, they may seem ineffective at first glance.However, if you can establish and close out hedged positions at the right moments, it is possible to pursue profits while avoiding the escalation of losses caused by sudden exchange rate fluctuations.

You’ll find many benefits to hedging trades in Exness’s excellent trading environment, which features high leverage of up to 2,000x and a zero-cut system (*).However, there are also disadvantages, such as the potential for trading costs—including spreads and swaps—to add up. Please be sure to consider both the advantages and disadvantages before using hedging strategies safely and effectively.

With Exness’s hedging trades—which are available under excellent trading conditions regardless of your trading strategy—you can enjoy the following benefits.

With Exness, you can aim for substantial profits through high-leverage trading while temporarily hedging against price fluctuations using hedging strategies. Exness offers industry-leading leverage of up to 2,000x, allowing you to engage in more dynamic trading.While high-leverage trading offers the potential for substantial profits, it can also result in significant losses if the market moves in an unexpected direction; therefore, hedging—which helps prevent losses from widening due to price fluctuations—is an effective strategy.

For example, if you expect the USD/JPY (U.S. dollar/Japanese yen) to rise, you open a “long” position and, as a risk hedge, open a “short” position of the same size.If the price rises as expected, you close the “sell” position and seek to profit from the “buy” position. If, on the other hand, the price falls contrary to your expectation, you can close the “buy” position and aim to profit from the “sell” position.

In this way, hedging allows you to pursue profits while minimizing losses, even in high-leverage trading. Since Exness employs a zero-cut system, even if losses exceed your margin, you will not be required to make a margin call (additional margin), and Exness will reset your balance to zero.While Exness’s zero-cut system provides an environment where you can focus on trading with peace of mind, you can also implement trading strategies that use hedging to avoid depleting your margin.

With Exness, you can engage in swap point arbitrage by utilizing hedged trading. Swap point arbitrage is a trading strategy that involves accumulating the difference between the positive and negative swap points generated by long and short positions to generate profit.By holding only positions that generate positive swap points, you can steadily accumulate swap points every day. However, if the market reverses sharply and unrealized losses expand, there is a risk that both your margin and the accumulated swap points will be lost due to a margin call.By hedging against this price fluctuation risk through hedging trades, although the amount of positive swap points received will be reduced by negative swap points, you can safely accumulate swap points while avoiding a sharp decline in your margin maintenance ratio.

In addition, Exness allows for hedging across different brokers—a practice prohibited by other companies. You can efficiently arbitrage swap points by combining an Exness account with accounts at other brokers that offer higher positive swaps or lower negative swaps.

Please note that at Exness, you can trade certain instruments on a swap-free basis across all account types.Swap-free trading is available for a wide range of instruments, including cryptocurrencies, stock indices, major currency pairs (excluding the DXY), select minor currency pairs, gold (XAU/USD), and crude oil (USOIL). If you plan to engage in swap point arbitrage, please check the swap-free eligibility status in advance.

With Exness, you can aim for long-term gains from a single price direction while also capitalizing on short-term trends that move in different directions. Foreign exchange markets form long-term trends while fluctuating up and down. While waiting for prices to rise over a long period—ranging from several weeks to several months—trends in the opposite direction may occur over shorter periods, lasting from a few hours to a few days.

If you open a position opposite to your existing one to capitalize on this short-term trend, it constitutes a hedged trade; therefore, with brokers that prohibit hedged trading, you’ll have to let this opportunity pass you by.However, Exness officially permits hedging and has no specific restrictions on it, so you can pursue long-term capital gains while also generating short-term profits through scalping and day trading.

There are also some drawbacks to hedging with Exness. Please review these in advance before using hedging strategies.

Since hedging involves opening both a “long” and a “short” position, it has the disadvantage of doubling trading costs. The trading costs incurred in FX trading are the “spread” and “transaction fees.”Since trading costs are incurred with every trade, hedging inevitably doubles these costs. While hedging is effective in various situations—such as to avoid an increase in unrealized losses or to maximize profits—it is important to use this strategy strategically, taking trading costs into account.While hedging does have the drawback of doubling transaction costs, Exness offers low spreads—below industry standards—across its five account types, allowing you to trade at a low cost.While external trading commissions apply only to the Low Spread and Zero accounts, both account types feature extremely tight spreads starting at 0 pips, allowing you to keep your total trading costs low. Please select a trading account that suits your trading instruments and strategy, and take advantage of hedging at the lowest possible cost.

Hedging trades must be conducted with caution, as losses can escalate depending on the timing and strategy used. For example, if you enter a hedged position, decide that an uptrend has begun, and close out the opposing “sell” position with a stop-loss order, but the price then reverses and drops sharply, the unrealized loss on your “buy” position will increase.Furthermore, in hedging trades aimed at arbitraging swap points, fluctuations in swap rates could result in negative swap payments on both positions.

Hedging is an effective method for limiting losses. However, if not executed strategically, it can actually increase losses; therefore, you must thoroughly analyze the market before deciding when to place or close hedging positions.In addition, while engaging in hedging, you can mitigate the risk of increased losses by regularly checking for fluctuations in swap points and significant market changes.

Since Exness does not prohibit hedging, you can freely use hedging strategies in your trading without worrying about detailed rules or restrictions. Hedging across multiple accounts—which is prohibited at other brokers—is also permitted with Exness.

Hedging within the same Exness account is an effective risk management strategy when there is a high likelihood of significant market movements but the direction is unpredictable. For example, you can use hedging at times when the foreign exchange market is likely to be affected, such as during the release of key economic indicators or statements by key figures.Once a trend is confirmed, you can close the opposite position and pursue profits with the position aligned with the trend.

Hedging within the same account does not trigger a margin call because unrealized gains and losses offset each other. If you want to limit your losses without missing out on profit opportunities, we recommend hedging within the same account at Exness.

Hedging across multiple accounts—including accounts with other brokers—is an effective strategy when you want to reliably generate significant profits through high-leverage trading while limiting losses to the amount of your margin. When you use high leverage to hedge across accounts, you’ll have substantial unrealized gains in one account and substantial unrealized losses in the other.Due to the high leverage, the unrealized loss may widen, potentially triggering a margin call in a short period of time; however, you can simultaneously realize a profit in the other account.

Even if a stop-out is triggered, Exness’s Zero Cut System resets any negative balance to zero, so you will not incur losses exceeding your margin. Using this hedging strategy is considered an abuse of the Zero Cut System and is prohibited by most FX brokers.If you plan to engage in hedging across accounts at Exness and other brokers, please carefully verify that this does not constitute a prohibited activity with the other broker before beginning your trades. Please note that Exness does not prohibit hedging based on the Zero Cut System; therefore, we recommend using multiple accounts within Exness for cross-account hedging.

When engaging in hedging trades on Exness, please keep the following points in mind.

Exness does not have any specific prohibitions or detailed rules regarding hedging. However, since rules vary by FX broker, if you plan to engage in hedging using an account with another broker, you must review their terms and conditions in advance.

Please be aware that if you violate the Terms of Service, you may be subject to penalties such as forfeiture of profits or account suspension.

Only when you open hedging positions within the same Exness account will the required margin for “buy” and “sell” positions be offset against each other.The required margin is the amount of margin needed to execute a trade. For example, if opening a long position requires a margin of 500 yen, the margin required to open an opposite position with the same lot size within the same account will be offset by the long position, resulting in a margin of 0 yen. On MT4(MetaTrader 4)/MT5 (MetaTrader 5), the margin field itself will be hidden (on the MT4 smartphone app, it will display “Margin: 0”).

If the lot sizes of hedged trades differ, only the matching lots between the buy and sell positions will be offset, and margin is required for the remaining positions.

Please note that even if you have an Exness account, the required margin will not be offset when opening hedging positions across different accounts.

For cryptocurrency CFDs, including ETH (Ethereum) and LTC (Litecoin), when engaging in hedging trades and closing out one side of the position in full or in part, the position must be at least 0.1 lots. Please be sure to trade strategically when hedging with these instruments, taking into account the possibility of closing out the position in full or in part.