Locked hedges and the margin that comes back
Posted: Mon Nov 02, 2026 8:35 am
Locked hedges and the margin that comes back
Open a buy and a sell on the same pair and net exposure is zero. Some brokers charge no margin on the locked portion. Others charge full margin on both legs.
The sting comes when one leg closes. The remaining position suddenly needs margin again, and if the account was running tight, a margin call appears right when the trade should have become safer.
Rules vary by broker, account type, and sometimes by regulated entity. The contract specifications page holds the answer, and it is boring enough that few ever read it.
Worse, the margin rule can differ between the trading terminal and the broker's back office. The platform may show a healthy margin level while the risk system applies a different formula for locked positions, and the first sign of the mismatch is a stop-out message.
A few practical checks:
Read the contract specification for "hedged margin" or "margin for hedged positions" on each symbol.
Open a tiny locked pair on a live account and watch what the margin figure does at every step.
Close one leg and see what the free margin does the instant after.
Notice whether the rule changes with account type, since a raw account and a standard account at the same broker can differ.
A hedge that looks free on paper can tie up more capital than expected, and the moment it gets unwound is when the surprise lands. It is much cheaper to see that with a 0.01 lot test than with a full size position.
Some brokers also change the rule during high volatility, which means a test done on a quiet Tuesday may not describe Friday afternoon at all. Repeating the test at different times of the week is worth the extra effort.
Which broker rule on hedged margin has caught you out?
Open a buy and a sell on the same pair and net exposure is zero. Some brokers charge no margin on the locked portion. Others charge full margin on both legs.
The sting comes when one leg closes. The remaining position suddenly needs margin again, and if the account was running tight, a margin call appears right when the trade should have become safer.
Rules vary by broker, account type, and sometimes by regulated entity. The contract specifications page holds the answer, and it is boring enough that few ever read it.
Worse, the margin rule can differ between the trading terminal and the broker's back office. The platform may show a healthy margin level while the risk system applies a different formula for locked positions, and the first sign of the mismatch is a stop-out message.
A few practical checks:
Read the contract specification for "hedged margin" or "margin for hedged positions" on each symbol.
Open a tiny locked pair on a live account and watch what the margin figure does at every step.
Close one leg and see what the free margin does the instant after.
Notice whether the rule changes with account type, since a raw account and a standard account at the same broker can differ.
A hedge that looks free on paper can tie up more capital than expected, and the moment it gets unwound is when the surprise lands. It is much cheaper to see that with a 0.01 lot test than with a full size position.
Some brokers also change the rule during high volatility, which means a test done on a quiet Tuesday may not describe Friday afternoon at all. Repeating the test at different times of the week is worth the extra effort.
Which broker rule on hedged margin has caught you out?