Hedged orders, also known as offsetting orders, are orders made for the same instrument in opposite directions. For example, 1 lot Buy EURUSD and 1 lot Sell EURUSD.
Note: If the suffixes are different, the orders cannot be considered as hedged.
Margin for hedged orders
There is no margin held for hedged orders in Standard Cent, Standard, Pro, Raw Spread and Zero accounts.
Fully hedged vs Partially hedged
Let us understand this using an example:
If you buy 5 lots EURUSD and sell 5 lots EURUSD, these orders are considered as completely hedged since the volume is matching in full.
If you buy 5 lots EURUSD and sell 3 lots EURUSD, these orders are considered partially hedged. There is no margin held for the 3 lots that are matching in volume, while for the remaining 2 lots of the buy order, margin will still be kept on hold.
Closing an order that is hedged
If you choose to close an order that is hedged, its counterpart gets unhedged automatically. Thus margin will then be charged for the remaining order.
Let us look at an example:
Assume you have two orders 3 lots of Buy EURUSD and 3 lots Sell EURUSD, completely hedged. There is no margin held.
If you choose to close the 3 lots of Buy EURUSD, the remaining 3 lots Sell will become unhedged and full margin will be held for those 3 lots.
*If you are closing orders using close by hedge or partially close in Bitcoin Cash, Ethereum, Litecoin or Ripple, the volume of the closed position cannot be lesser than 0.1 lot (10 lots in case of Ripple).