Forex Hedging Explained: Same-Account Hedges, Costs and Rules

Short answer: forex hedging means opening a position that offsets the risk of another one. There are two common forms. In a same-account hedge you hold a buy and a sell of the same pair at the same time, which freezes the profit or loss from price moves but not the costs. In a pair hedge you offset the exposure with a different pair, which usually leaves a new risk behind. Whether you can hold both sides at once depends on the broker and the platform: MetaTrader 5 has a hedging mode and a netting mode, and US rules require offsetting positions to be closed first-in, first-out. This guide works through the costs with numbers so you can check the arithmetic yourself. It is general education, not advice on any trade.

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Sources: the MetaTrader 5 help ("Executing Trades", position accounting systems), the NFA rulebook (Compliance Rule 2-43), and the Exness Help Center articles "Hedged orders", "Margin" and "About swap", checked November 6, 2026. Prices, spreads and swap rates in the examples are made up for the arithmetic and are not Exness rates.

Two kinds of hedge

Type	What you do	What it removes	What is left
Same-account hedge ("locking")	Buy and sell the same pair in the same account	Price risk on the matched volume	Spread, swap, commission, and the decision of when to unlock
Pair hedge	Open a position in another pair to offset an exposure	Part of one exposure (for example USD)	A new exposure, and a correlation that can change

Neither is free, and neither guarantees a profit. A hedge changes the shape of your risk.

Same-account hedging: a costed example

Take 1 lot of EUR/USD (100,000 euros). One pip on 1 lot is USD 10. Assume:

• Quotes: bid 1.10000, ask 1.10010, a spread of 1.0 pip (made-up numbers).
• You are long 1 lot, then open a short of 1 lot at the same time.
• Leverage 1:100 on the account (made-up).

Price risk. The buy opened at the ask (1.10010) and the sell at the bid (1.10000). If you closed both later at the same quotes, you would lose the spread on each leg: 1.0 pip x USD 10 x 2 legs = USD 20. Between opening and closing, a move in price gains on one leg and loses the same amount on the other, so the total stays near the locked amount. It only changes when the spread changes.

Swap. Swap is charged or credited per leg, per night. Exness states that swap is applied at 21:00 GMT+0 in summer and 22:00 GMT+0 in winter, with a triple rate on one day a week (Wednesday for forex, Thursday for USDCAD) (About swap). The long and the short side have different rates, and either can be a debit or a credit. Suppose, with made-up numbers, the long side is charged USD 6.50 per lot per night and the short side is credited USD 2.10:

• Net per night = 6.50 - 2.10 = USD 4.40 charged.
• A Monday-to-Friday week = 1 + 1 + 3 + 1 + 1 = 7 nights' worth, so 7 x 4.40 = USD 30.80.

Margin. The Exness formula is Margin = Lots x Contract Size / Leverage, so 1 lot of EUR/USD at 1:100 is 100,000 / 100 = EUR 1,000, about USD 1,100 at a rate of 1.1000. Exness states that margin for fully hedged orders is zero, and for partially hedged orders it is held on the unmatched portion only (Hedged orders, Margin). Other brokers can apply different rules, so check yours.

Total for the week with these made-up numbers: USD 20 + USD 30.80 = USD 50.80, plus commission on account types that charge it, for a position whose price risk is frozen. If your account is swap-free, the swap line is zero, but check the conditions for any other overnight charge.

What happens when you close one side

Closing one leg turns the other back into an ordinary position. Exness gives this example: with 3 lots buy and 3 lots sell EUR/USD (fully hedged), closing the buy leaves the sell exposed and full margin is held on it. At the 1:100 leverage above, that is 3 x 100,000 / 100 = EUR 3,000. If you hold 5 lots buy and 3 lots sell, margin is held only on the unmatched 2 lots: 2 x 100,000 / 100 = EUR 2,000.

Exness also warns that hedged orders can still stop out if equity becomes negative or the margin level falls below the account's requirement, and that during high margin requirements you may not be able to close one side of a hedge if the other would need more margin than you have free. Its own example: a USD 100 account with 1 lot buy and 1 lot sell at 1:2000, where leverage drops to 1:200, so closing the sell would require about USD 550 of margin for the remaining buy (Hedged orders). See the stop out guide.

Pair hedging: why it rarely cancels risk

Say you are long 1 lot of EUR/USD, so you are effectively short the US dollar. You open a long position in USD/CHF to offset the dollar exposure.

• Pip value of 1 lot USD/CHF is CHF 10. At USD/CHF 0.8000, that is 10 / 0.8000 = USD 12.50 per pip (made-up rate).
• To match the USD 10 per pip of the EUR/USD trade, you would use 10 / 12.50 = 0.8 lots.

The dollar legs cancel, but long EUR/USD plus long USD/CHF is close to a long EUR/CHF position. You swapped dollar risk for euro-against-franc risk, and both legs pay spreads and swap. Correlation between pairs also moves over time; see currency correlation. Pip values are covered in the pip value guide.

Broker and platform differences

• MetaTrader 5 account types. MT5 supports two position accounting systems, netting and hedging, and "the system used depends on the account and is set by the broker" (MetaTrader 5 help). With netting, an opposite deal reduces, closes or reverses the single position in that symbol. With hedging, several positions in one symbol, including opposite ones, can exist at once.
• US brokers. The National Futures Association's rule for forex dealer members says they may not carry offsetting positions in a customer account but must offset them on a first-in, first-out basis (NFA Compliance Rule 2-43(b)). So the same-account lock described above is not available at US-regulated brokers. Exness says it does not offer services to US residents.
• Margin treatment. Zero margin on a fully hedged pair is Exness's published rule, not a universal one.

Always confirm in your own Personal Area or platform whether a demo account lets you open both sides, then test it before using real money (demo account guide).

Common misunderstandings

• "A hedge locks in a profit." It freezes price exposure on the matched volume. Spread and swap keep running, and a locked loss is still a loss.
• "A hedge protects me from a stop out." Hedged orders can still stop out, as the Exness article above states.
• "Hedging costs nothing if margin is zero." Zero margin is not zero cost; the example above costs USD 50.80 in a week.
• "Hedging works the same everywhere." Netting accounts and US rules change what is possible.
• "Unlocking is easy." Choosing when to close which leg is a new trading decision with its own risk.

Frequently asked questions

What does hedging mean in forex?

Opening a position that offsets the risk of another, either by holding a buy and a sell of the same pair or by using another pair.

Is hedging legal in forex?

It depends on the broker and its regulator. US forex dealer members must close offsetting positions first-in, first-out under NFA Rule 2-43(b). Other brokers may allow both sides.

What is the difference between netting and hedging on MT5?

Netting keeps one net position per symbol; hedging allows several positions per symbol, including opposite ones. The broker sets the system.

Does a hedged position need margin?

It depends on the broker. Exness states fully hedged orders have zero margin and partially hedged orders have margin on the unmatched part.

Does hedging avoid swap?

No. Swap can apply to each leg. Swap-free accounts remove swap, subject to the broker's conditions.

Further reading

• Forex swap explained
• Margin in forex
• Spreads explained
• Currency correlation
• MT4 vs MT5
• Forex risk management

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Risk warning: Forex and CFD trading involves a high risk of loss. This article is general information, not investment advice.