What Is a Hedged Margin?

Hedged margin is the capital required to maintain a locked (hedged) position in forex trading. It ensures that both buy and sell trades on the same currency pair remain open without requiring full margin for both positions.

How Hedged Margin Works

If the hedged margin is 50%, the broker only requires margin for one side of the trade.

Example:

• Hedged Margin: 50%
• 1 lot buy on EUR/USD = $100 margin
• 1 lot sell on EUR/USD = $100 margin
• Total margin for both positions = $100 (not $200)

Since the positions offset each other, the margin requirement remains the same rather than doubling. This allows traders to reduce margin usage while keeping both positions open.

Benefits of Hedged Margin:

✔ Lowers margin requirements for hedged trades.
✔ Provides flexibility in managing risk.
✔ Helps traders hold positions longer without additional margin pressure.