We are very excited to let you know that we have taken the opportunity to set any hedged positions to a zero-margin requirement. This is to further enhance your trading experience with Equiti, enabling you to free up margin so you can trade more with the same deposit.

As of Monday August 7, 2017 when you decide to hedge a position in one particular instrument (respectively buying or selling the same amount of that instrument), there will not be any margin needed to maintain the hedged position. As such, your net position will be equal to zero.

As a result of the decreased margin, you will have the benefit of more available funds.

Let’s take the following examples to illustrate the effect of this shift in Equiti’s trading terms and conditions:

Previous Setting – 50% margin on hedging

Type Size Symbol Price Margin Required
Buy 1 lot EURUSD 1.18343 236.69 USD
Sell 1 lot EURUSD 1.18329 236.66 USD
TOTAL MARGIN REQUIREMENT: (236.69 + 236.66) * 50% = 236.67 USD

 New Setting as of Monday August 7, 2017 – 0 margin on hedging

Type Size Symbol Price Margin Required
Buy 1 lot EURUSD 1.18343 236.69 USD
Sell 1 lot EURUSD 1.18329 236.66 USD
TOTAL MARGIN REQUIREMENT: 0 USD

 

BE AWARE!

While the margin free hedging is a great tool to assist you in deciding whether you increase your investments, it can also pose a risk of triggering either “Margin Call” or “Stop Out” events if one of the positions is closed and the other requires a margin that equals or exceeds the one available for trading.

You should also note that the result of hedging positions is not always fixed, as it varies together with the spread. Sudden spread widening (during news releases for example) can also lead to a margin call or stop out as the widening negatively affects both positions and thus causing overall losses.

Margined Forex and CFD trading are leveraged products and can result in losses that exceed deposits. The value of your contract can fall as well as rise, which could result in receiving back less than you originally deposited. Please ensure you understand the risks and be sure to manage your risk exposure effectively. Equiti does not provide any investment advice.