Yes, you can hold both Buy (Long) and Sell (Short) positions on the same trading product simultaneously, subject to the applicable product conditions. This is known as hedging, which is supported by Ultima Markets trading accounts on MetaTrader 4 (MT4) and MetaTrader 5 (MT5), subject to the applicable account settings. Each Buy and Sell position remains separate and can be managed or closed independently.
What should I check before holding hedged positions?
Before holding positions in opposite directions, you should:
- Check the trading product's specification for applicable margin requirements.
- Review your available free margin to ensure you can open the additional position.
- Consider the trading costs associated with maintaining both positions.
How much margin is required for hedged positions?
Opening an opposite position is treated as a new trade. However, hedged positions may require reduced or zero margin for the hedged portion.
- Margin requirements: The margin required depends on the trading product and the size of the hedged positions.
- Insufficient margin: If your trading account does not have sufficient free margin to open the opposite position, the new order may be rejected.
- Margin requirements for hedged positions may vary depending on the account's margin calculation settings and the relative volumes of the Buy and Sell positions. Holding opposite positions does not necessarily eliminate margin requirements.
Do trading costs apply to hedged positions?
Yes. Trading costs may apply to both Buy and Sell positions, including:
- Spread: The difference between the Bid and Ask prices.
- Commission: Trading commission, where applicable.
- Swap: Overnight financing charges or credits, where applicable.
These costs do not necessarily offset each other, and hedging does not eliminate existing trading losses.
If you have questions about hedged positions, contact Ultima Markets Live Chat with your trading account number and the trading product for assistance.
Hedging does not guarantee protection against losses. Both positions remain exposed to market movements and applicable trading costs, including spreads, commissions and overnight financing charges where applicable.
