US Forex Brokers Allowing Hedging
In 2009, the NFA (National Futures Association) implemented a set of rules that essentially ban the use of forex hedging strategy in the United States. This rule is to be carried out by brokers which later disable the opening of two opposite positions for the same currency pair at the same time. The reasons are that hedging increases the customer's financial costs and generates significant potential for abuse.
In order to make hedging possible, the US forex traders are advised to get around the restriction by opening two accounts in the same broker or different ones, then open a short position in a currency pair on one of the accounts and long it on the other.
If you're not a US resident or a trader living in the USA but still want to trade in a broker from that country, you can choose one that has a global offering and open an account on their website that is specifically provided for global clients. You can expect such service from the brokers below.
Additional FAQ
How to apply hedging in CFD trading?
For example, you are a gold investor and already own plenty of it. However, you are worried that the gold price might deplete due to a surge in the USD. Perhaps you don't want to close your positions in gold since you believe it might rise again in the future. To cover the temporary loss, you can open a short position on the gold CFD.
Continue Reading at Top 5 CFD Trading Strategies You Should Try
How to avoid short squeeze risks with hedging?
Hedging is a strategy that can remove uncertainty in investing to a greater extent. In addition, this strategy can protect your profits and reduce losses in the event of a crash or price correction. For example, a buy order to counter a losing sell position would count as hedging.
Hedging may seem counterintuitive as it is essentially entering a position opposite to the current position. However, this strategy reduces the level of risk due to price movements that can harm traders when buying shares. If your one order encounters unexpected loss due to a short squeeze, the other one would likely be still in position.
Continue Reading at Short Squeeze: How It Happens and What to Do
Which bonuses allow the use of hedging strategies?
FBS $50 No Deposit Bonus, AGEA $5 No Deposit Bonus, FXOpen $10 No Deposit Bonus.
Continue Reading at Forex Brokers with No Deposit Bonus
Why you should consider trading indices?
Trading indices has plenty of benefits for traders. Such as:
- Hedging
- Diversification
- Low cost
- Less liquidity risk
- Convenience
Continue Reading at Why Trading Indices Can Be Beneficial for You