Interbank FX (IBFX) Introducing Intraday Hedging

In a very interesting development, IBFX has apparently found a loophole in NFA's ruling regarding hedging. Read on:

Dear Valued Customer,

We will be introducing Intraday Hedging into the demo accounts on Dec 10th, with plans to introduce Intraday Hedging to the live accounts on or around Dec 20th. What this means to your account:

- You will be able to place both long and short orders in the same currency pair during the course of the day.

- Just before swap at approximately 5 pm Eastern Time if you are still in your hedge, the trades will be netted out, please see the example below.

We recommend that you test your experts and trading strategies that use hedging thoroughly on a demo account before using them on your live account.

Example #1:

At 10:11:00 Eastern you open a 2 lot long on the EUR/USD at 1.4730 (ticket #1).
At 13:01:01 Eastern you open a 2 lot short on the EUR/USD at 1.4733 (ticket #2).

Just before swap, at approximately 17:00 Eastern, ticket #1 is closed out at 1.4733 and ticket #2 would show 0 lots with an open and close price of 1.4733.

Example #2:

At 10:11:00 Eastern you open a 1 lot long on the EUR/USD at 1.4730 (ticket #1).
At 13:01:01 Eastern you open a 2 lot short on the EUR/USD at 1.4733 (ticket #2).

Just before swap, at approximately 17:00 Eastern, ticket #1 is closed out at 1.4733. The remainder of ticket #2 would allocate to a new trade ticket of 1 lot short at 1.4733. Swap would be charged to this new ticket for that symbol’s rate for one lot.

Example #3:

At 10:11:00 Eastern you open a 5 lot long on the EUR/USD at 1.4730 (ticket #1).
At 13:01:01 Eastern you open a 2 lot short on the EUR/USD at 1.4733 (ticket #2).

Just before swap, at approximately 17:00 Eastern, 2 lots of ticket #1 would close at 1.4733. Ticket #2 would show 0 lots with an open and close price of 1.4733. The remainder of ticket #1 would allocate to a new trade ticket of 3 lots long at 1.4730. Swap would be charged to this new ticket for that symbol’s rate for three lots.

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