In short
- MT4 accounts allow opposite positions on the same symbol.
- MT5 accounts run in hedging or netting mode.
- A same-pair hedge locks in P&L but still costs money.
Hedging vs netting on MT5
| Hedging mode | Netting mode | |
|---|---|---|
| Opposite positions | Held separately | Offset into one net position |
| Typical use | Forex/CFD brokers | Exchange-traded markets |
| Closing | Close each position | Trade the opposite size |
Margin on hedged positions
Many brokers reduce or remove margin for fully hedged positions on the same symbol, but policies differ. Check your broker's specification before relying on it.
When hedging is used
- Temporarily neutralising exposure around an event without closing a long-term position
- Some grid and EA strategies
- Cross-pair hedges, such as offsetting USD exposure across pairs
The downside
A same-pair hedge is economically similar to closing the trade, but you pay spreads twice and financing on both legs. Many traders simply close and reopen instead.
Frequently asked questions
Is hedging allowed with UK brokers?
Generally yes. UK brokers don't apply the US 'no hedging' (FIFO) rule, but check your broker's terms.
Does hedging remove risk?
A full hedge on the same pair locks in your current profit or loss, but you still pay spreads and financing on both positions.
CFDs and spread bets are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading these products. You should consider whether you understand how they work and whether you can afford to take the high risk of losing your money.