When a trader has an open position a hedge trade is placed in the opposite direction but doesn’t close the original position. This is done for largely reporting reasons.
In this tutorial, we’re going to place a hedge trade that will allow us to have a long and a short position open within the same market at the same time.
By default, the platform is designed so that if we were to have a pound a point long position in the Wall Street 30, and we were to open a pound a point short position in the Wall Street 30, this would simply close out our existed long Wall Street trade to leave us with no open positions in the market, like so. You can now see we have no open trades running in the open positions tab.
However, if we then open another pound a point long position in the Wall Street 30, like so, and this time we open a trade ticket to sell a pound a point, will notice a hedging option below the buy and sell price on the deal ticket. By selecting this before clicking submit, you will now see that it has executed our short position while keeping our long position open in the same market.
It is important to check the hedging box is ticked before submitting the trade and by doing so this will allow you to run trades of opposite directions, within the same market simultaneously.
So that’s how we place a hedge trade on the platform, and we look forward to seeing you in the next tutorial.