Definition
What is Hedging?
Hedging is opening a position that offsets the risk of another, for example holding a buy and a sell on the same or a closely related instrument.
Investors hedge to protect a portfolio: if one position loses, the hedge gains. In short-term trading, a full hedge simply freezes the result while costs keep running.
At prop firms the problem is cross-account hedging: buying on one account and selling the same instrument on another, so one account is sure to pass while the other fails. It exploits the evaluation instead of showing skill.
For that reason prop firms prohibit opposite positions across accounts and use automatic checks to detect them.
Example
Example: a trader buys 1 lot of EURUSD on account A and sells 1 lot on account B. A 50-pip move makes $500 on one and loses $500 on the other: the net result is zero minus costs, and both accounts are in breach of the rules.
At a prop firm
The Axora Funded terms prohibit hedging or opposite positions across accounts, whether yours or anyone else’s, on every account. Opposite positions opened close together on accounts of the same user are flagged for review.
Frequently asked questions
Is hedging across two of my own accounts allowed?
No. Opposite positions across accounts are prohibited, even if both belong to you.
Why is cross-account hedging treated as abuse?
Because it guarantees one account passes without any real trading skill.