Hedging two positions means paying the spread twice for nothing
Posted: Sat Oct 31, 2026 8:17 pm
Locking a losing trade by opening the opposite one feels like a clever pause button. The loss stops growing, and a decision can wait. The cost is real, though.
Each position pays its own spread. The hedged pair has paid two spreads, locked the loss, and still needs to be unwound. When one leg is closed, the other becomes exposed again, and the same problem returns with added cost.
Swap also applies to both positions, and margin may or may not be offset depending on the broker. Some brokers require full margin on each leg.
A hedge delays the decision without making it. Closing the position and re-entering when the setup is valid again is usually cheaper and clearer.
There are legitimate uses, such as managing exposure around news while keeping a longer-term position. For a scalper, they're rare.
Looking back at past hedges in the journal and totalling the extra costs often removes the appeal.
Have you ever calculated what your hedges cost in spread and swap?
Each position pays its own spread. The hedged pair has paid two spreads, locked the loss, and still needs to be unwound. When one leg is closed, the other becomes exposed again, and the same problem returns with added cost.
Swap also applies to both positions, and margin may or may not be offset depending on the broker. Some brokers require full margin on each leg.
A hedge delays the decision without making it. Closing the position and re-entering when the setup is valid again is usually cheaper and clearer.
There are legitimate uses, such as managing exposure around news while keeping a longer-term position. For a scalper, they're rare.
Looking back at past hedges in the journal and totalling the extra costs often removes the appeal.
Have you ever calculated what your hedges cost in spread and swap?