Hedged orders, also known as offsetting orders, are orders made for the same instrument in opposite directions. For example, 1 lot Buy EURUSD and 1 lot Sell EURUSD.
Fully hedged vs. Partially hedged
To understand the difference, let’s take a look at this example:
If you buy 5 lots EUR/USD and sell 5 lots EUR/USD, these orders are considered fully hedged since the volume is matching in full.
If you buy 5 lots EUR/USD and sell 3 lots EUR/USD, these orders are considered partially hedged.
There is no margin held for the 3 lots that are matching in volume, while for the remaining 2 lots of the buy order, the margin will still be kept on hold.
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