Account Comparison Netting VS Hedging

The netting accounting system implies that at one point in time there can be only one open position on the account for the same symbol:

  • if there is a position for the instrument, when a transaction is executed in the same direction, the volume of this position increases.
  • when a transaction is executed in the opposite direction, the volume of the existing position decreases, it is closed (when a transaction is executed in a volume equal to the volume of the current position), or a reversal (if the volume of the opposite transaction is greater than the current position).

Hedging is the opening of trades in one market to offset the price risk exposure of an equal but opposite position in another market. Usually hedging is carried out to hedge against the risks of price changes. As an example, you can open a position on the EURUSD pair, one for Sell, the other for Buy.

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