Hedging in Spot Forex with IB TWS?

Discussion in 'Interactive Brokers' started by Blonde, Jun 10, 2021 at 10:55 PM.

  1. Blonde


    Dear Mr @def

    Thanks for answering my previous questions. May please guide me while Hedging is allowed by regulation for me/my-company, how shall I request that my Spot Forex trading account have Hedging possibility, please? To make my question clear I shall state below:
    Target market in question: Spot Forex
    Trading currencies in question: Major pairs in Spot Forex

    I want to be able to open Long and Short positions and have Long and Short positions at the same time with the same Spot Forex Major pair, and I don't want when I open an opposite side trade, smaller position to get deducted from the larger position and I remain with only one side position Long or Short whichever position size that was larger if you know what I mean?

    I experience anomalies with TWS, as sometimes I opened a demo account and when I opened an opposite side position, its closed the same position size of the larger position and I left with one side position Long or Shor, whichever one that was larger?

    I experience different approaches some other times as I'm aware that I had demo trading accounts that when I opened an opposide side position, it didn't close the opposite side position and finally I ended with two positions with any size(any size of original positions remained intact) and I didi ended up with positions in two opposite sides of the market, Long and Short at the same time?

    Answer-A I spoke with the customer service of IB, and two different answers told to me, one customer service representative told me even if you are non-American still you can't Hedge in the Spot Forex as if you open position on the opposite side in TWS, the platform close the positions in the condition that smaller position will be deducted from the larger position and you end up with only one position in one side of the market in the size of the difference between Long and Short positions you opened?

    Answer-B I spoke with another customer service representative and they told me that we open you two account that can have shared margin and you can open a Long position on one and a Short position on another to do have Long and Short positions at the same time in the Spot Forex market as this is the only solution?

    In case if the Answer-B is the genuine response and correct, thus why shall I experience different situations with TWS demo accounts as some demo accounts that I had closed the deduction of Long/Short position from Short/Long position accordingly but some demo account didn't and I finally ended up having Long and Short position on Spot Forex in the same time in the TWS?

    In case if the Answer-B is genuine response and correct, will open two positions in the same size one as Long and one as Short bring the used/utilized/initial/maintenance margin to 0 or near to zero amount or what? Is this happen automatically in every account or shall I put a request for this to the customer service representative?

    In case if the Answer-B is a genuine response and correct, why can't I do this with the live account and customer service shall open two accounts for me to open Long positions in one and Short positions in another while this can happen in one demo account, in case I'm able to open that kind of demo account as not all the demo account are capable of doing this and I don't exactly know how to open a demo account that can do this precisely?

    In case if the Answer-B is genuine response and correct, in case of having two accounts with a shared margin for Hedging is the only case, will opening one position in the same size as Long and Short bring my used/utilized/initial/maintenance margin to 0 as for two accounts that have shared margin?

    How can I open a demo account that can have the Long and Short position at the same time in the Spot Forex market, please?

    May you kindly respond under my sentence that helps me understand which part are you referring to in your response, please?

    Tnx and best of luck
  2. Lol, that's not called hedging, it's called idiocy. Just think about it for a second. As we speak you are right now "hedging" many thousands of instruments. Yes, you heard that right, you are long and short at the same time. It's called ZERO EXPOSURE. :D:D:D:D:D:D

  3. cesfx


    Hedging in spot with an opposite trade is simply taking the opposite order, it shouldn't even be called an hedge.

    What difference does it make to have the position closed, or visually open but totally or partially flat? You are basically freezing the position (or the loss).
    The only advantage I could think of with some bucket shops out there, it's a temporary margin availability.
  4. Blonde


    What Is Hedging as It Relates to Forex Trading?

    "There are two related strategies when talking about hedging forex pairs in this way. One is to place a hedge by taking the opposite position in the same currency pair..."
    "Strategy one is to take a position opposite in the same currency pair—for instance, if the investor holds EUR/USD long, they short the same amount of EUR/USD."

    Despite the amount of 1:1or1:x(x is the amount related to original position size), thus this reputable reference calling this method Hedge and I believe I'm correct.

    About not answering some questions here, I point you out to 'About me' page description:

    "If I didn't answer your posts, it's just I'm super busy with my projects, and please don't take it personally."
    Also this,
    "Thanks for contributing your professional ideas and approaches to my posts. You may please answer with reference, provide mathematical theories proof, algorithm definition example of the approach, or simulation results to make the concept analytical."

    In my case personally, the regulations allow me and my associated corporate both to perform Hedge if it's necessary.

    Best of luck
  5. That is the stupidest excuse for not responding I have ever heard. So you don't mind bothering everyone else who is equally busy as you but you can't inconvenience yourself to provide feedback for some who made the effort to respond to your question? I call that lazy as fuck.

    But to anyone else who may come across this thread, here a simple solution, because I hear this hedging nonsense again and again. If you have separate strategies, one of which is long asset A, the other strategy short asset A at the same tine, then your net position is still zero, meaning, you SHOULD be flat with your broker. You can still maintain the virtual position in your strategy engine and if the strategy decides to flatten the original position then you act accordingly. But you should never have to be long and short in the exact same asset at the same time with your broker. It just makes zero sense.