Are you having trouble closing a hedged order?
You may be unable to close a hedged order due to insufficient free margin in your account.
During volatile and/or abnormal market conditions, where market risk is deemed high by the Company, a hedged order, and specifically the part of which was subject to nill margin requirements during opening, will be subject to margin requirements at the point of closure.
Therefore, you may need to ensure that you maintain sufficient free margin in your account in order to be able to cover the margin requirements applicable at all times.
You deposit 100 USD and open a Buy position for 1 lot EURUSD and a Sell position for 1 lot EURUSD with leverage 1:2000 at the price 1.1000. The free margin at the moment of opening hedged positions is 86 USD.
At the time of increased margin requirements when the leverage changes to 1:200, you decide to close the Sell position. The expected margin for the remaining order is calculated as follows:
lot * contract size / leverage * current market price EURUSD.
1*100000/200*1.1000 = 550 USD.
Hence, the free margin in this situation is going to be negative:
86 - 550 = -464 USD
Therefore, you won’t be able to close the hedged position unless there is a sufficient amount of free margin to support the margin requirements.