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, it has the potential to cause significant losses to both the trader and the FX broker. As a result, most brokers either prohibit hedging or have detailed rules and prohibited activities 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 2,000:1 (*), while avoiding increased losses due to price fluctuations through hedging.

A hedging strategy is a trading method in which you simultaneously hold both a "long" and a "short" position in the same currency pair. Since unrealized losses and gains offset each other in a hedging strategy, it may seem less effective at first glance. However, if you can establish and close out hedging positions at the right time, you can pursue profits while avoiding the risk of losses escalating due to sudden exchange rate fluctuations.

With Exness’s excellent trading environment—featuring high leverage of up to 2,000:1 and a zero-cut system—you can enjoy many benefits when engaging in hedging strategies(*). However, there are also drawbacks, such as increased trading costs due to spreads and swaps. Please carefully consider both the advantages and disadvantages to ensure you use hedging strategies safely and effectively.

With Exness’s hedging trading, which offers 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 2,000:1, allowing you to engage in more dynamic trading.While high-leverage trading offers the potential for substantial profits, it also carries the risk of significant losses if the market moves against your expectations. Therefore, hedging—which helps mitigate losses caused by price fluctuations—is an effective strategy.

For example, if you expect the USD/JPY (U.S. dollar/Japanese yen) exchange rate to rise, you open a "long" position and, as a risk hedge, open a "short" position for the same amount. If the rate rises as expected, you close the "short" position and seek to profit from the "long" position. If, on the other hand, the rate falls contrary to your expectation, you can close the "long" position and aim to profit from the "short" position.

In this way, hedging allows you to pursue profits while minimizing losses, even in high-leverage trading. Exness employs a zero-cut system, which means that even if losses exceed your margin balance, you will not be required to make a margin call (additional margin deposit), 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 the depletion of your margin balance.

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 suddenly reverses 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 drop in your margin maintenance ratio.

In addition, Exness allows for hedging across different brokers—a practice prohibited by many other firms. 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 Exness offers swap-free trading on select instruments across all account types. Swap-free trading applies to 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 arbitrage, please check the swap-free status in advance.

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

If you open a position in the opposite direction of your existing position to capitalize on this short-term trend, it constitutes a hedged trade. With brokers that prohibit hedged trading, you would have to pass up such opportunities. However, Exness officially allows hedged trading 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.

Since hedging involves opening both "long" and "short" positions, it has the disadvantage of doubling trading costs. In FX trading, the costs incurred are the "spread" and "commission." Since these costs are incurred with every trade, hedging inevitably doubles them.While hedging is effective in various situations—such as avoiding the expansion of unrealized losses or maximizing profits—it is crucial to use this strategy strategically while taking transaction costs into account. Although hedging has the disadvantage 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 fees apply only to the Low Spread and Zero accounts, both account types feature ultra-low spreads starting from 0 pips, allowing you to keep total trading costs low. Please select a trading account that suits your trading instruments and strategy, and take advantage of hedging at minimal cost.

Hedging requires caution, as losses can escalate depending on the timing and strategy employed. For example, if you enter a hedged position, decide that an uptrend has begun, and close the opposing “sell” position with a stop-loss order, but the price then reverses and plummets, 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 strategy for limiting losses. However, if not executed strategically, it can actually increase losses; therefore, you must thoroughly analyze the market before deciding when to open or close hedging positions. Additionally, you can mitigate the risk of increased losses by regularly checking for changes in swap points or significant market fluctuations while hedging.

Exness does not impose any restrictions on hedging, so you can freely use hedging strategies in your trading without worrying about detailed rules or limitations. Even hedging across multiple accounts—which is prohibited at other brokers—is permitted with Exness.

Hedging within the same account on Exness is an effective risk management strategy when the market is likely to experience significant volatility but the direction is unclear. For example, you can use hedging when events that affect the foreign exchange market—such as the release of key economic indicators or statements by key figures—are expected. Once a trend becomes clear, you can close the opposite position and pursue profits with a position aligned with the trend.

Hedging within the same account does not trigger a stop-out 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 secure substantial profits through high-leverage trading while limiting losses to the margin amount. When you hedge across accounts using high leverage, you’ll have significant unrealized gains in one account and significant unrealized losses in the other.Due to the high leverage, unrealized losses may expand rapidly, potentially triggering a margin call in a short period; however, you can simultaneously generate profits 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 never incur losses exceeding your margin. However, 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 ensure that such activity does not violate the rules of the other broker before proceeding.Please note that while Exness does not prohibit hedging based on the Zero Cut System, we recommend using multiple accounts within Exness for cross-account hedging.

When engaging in hedging trades with Exness, please note the following points.

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

Please be aware that violating the Terms of Service may result in penalties such as the forfeiture of profits or the freezing of your account.

Only when you open hedging positions within the same Exness account will the margin requirements for "buy" and "sell" positions be offset.The required margin is the amount of margin required for a trade. For example, if opening a long position requires a margin of 500 yen, the margin required to open an opposite position of 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) and MT5 (MetaTrader 5), the margin field itself will be hidden (on the MT4 mobile app, it will display "Margin: 0").

If the lot sizes of your hedged positions differ, only the matching lots (buy and sell) 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.

When engaging in hedging trades with cryptocurrency CFDs, including ETH (Ethereum) and LTC (Litecoin), any full or partial closeout of one position must be for 0.1 lots or more. Please be sure to trade strategically when hedging with these instruments, taking into account the possibility of a full or partial closeout.