What is Hedging?
Updated October 21, 2026
Hedging is opening a trade to offset risk on another trade or position.
Some traders buy and sell the same pair at once to freeze a loss.
Others hedge with related pairs.
Hedging can reduce swings but adds costs and doesn't erase a loss. It just parks it.
Example
You hold a gold buy and open a small sell during news to cut exposure.
Questions people ask
Do all brokers allow hedging?
No, US brokers generally don't.
Is hedging free?
No, you pay spreads and swaps on both sides.
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