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October 27, 2017

Question:How margin requirements are calculated on hedged positions?

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Answer:

Hedging is defined as the opening of two Transactions on the same instrument or underlying asset at different directions (one “buy” and the other “sell”), whether or not at the same time and whether or not for the same quantity.

iFOREX considers hedging transactions for the purpose of calculating the minimum margin on a cumulative basis or on a “net” basis.

Furthermore, iFOREX considers the closing of one of the hedged Transactions as the opening of a new Transaction which amount’s equals to the amount of the remaining Transaction.

Netting of Transactions

In the case where more than one deal needs to close simultaneously in an account, iFOREX will close all open positions as a bulk.

The transaction number assigned on each closed position is set based on FIFO rules.

This means that upon the closing of the positions, the first position opened will receive the lowest transaction number and the last position opened will receive the highest transaction number.

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