At DayTraders.com, we enforce strict risk management guidelines to promote transparent and fair trading practices. As part of these guidelines, hedging across accounts or within the same account is strictly prohibited.
What Does This Mean?
No Opposite Positions Across Accounts: Traders are not allowed to hold opposite positions (i.e., long and short) in the same or related instruments across different accounts. For example, if you go long on NQ (Nasdaq futures) in one account, you cannot go short on NQ in another account at the same time.
No Hedging in Related Instruments: Additionally, traders cannot hedge by taking opposing positions in related instruments, such as going long on NQ (NASDAQ) in one account and short on ES (S&P futures) in another account. Hedging between correlated markets or instruments is also not permitted.
No Simultaneous Long and Short Positions: Traders cannot simultaneously hold long and short positions on the same asset or related assets within any account, regardless of the trading strategy.
Please note that Hedging among evaluation accounts is allowed.
Consequences of Violating the No Hedging Rule:
Account Review and Suspension: Accounts found to be engaged in hedging will be flagged for review. Violations of this rule may result in the suspension or permanent closure of the accounts involved.
Why This Rule Exists:
Ensuring Fairness: Hedging across accounts or within the same account can create unfair advantages and distort trading performance. By prohibiting hedging, we ensure that all traders operate under the same rules and face similar market risks.
Encouraging Proper Risk Management: The No Hedging Rule encourages traders to employ responsible risk management strategies rather than relying on opposing positions to offset losses.
Monitoring for Hedging Activity:
Our platform continuously monitors trading activity to detect any hedging behavior. This includes reviewing trade execution across multiple accounts or related instruments to ensure compliance with this rule.
Ensuring Compliance:
To stay compliant, avoid holding opposing positions across multiple accounts or within any individual account. If you have questions or need clarification on the hedging rule, please reach out to our support team.
For additional information on trading rules and guidelines, please visit our Trading Policy.