Is it possible to close only a part of an open position?
For example, I go short on the CAD/JPY pair. It moves in my direction 20 pips. That 20 pips say, represents $200. Can I now remove that $200 from exposure to the market, take it out of play so to speak, and put it back into my account without having to liquidate the whole position?
Pippy
Yes.
For example, I go short on the CAD/JPY pair. It moves in my direction 20 pips. That 20 pips say, represents $200. Can I now remove that $200 from exposure to the market, take it out of play so to speak, and put it back into my account without having to liquidate the whole position?
In above example…No.
If you have only one lot in that position…micro/mini/standard…then no. If you have more than one, then you can, so in your example if you had 2 lots, which would be $400, you could close 1 lot and put $200 back into your account, then leave the rest to run and close it out later.
Thanks guys, so if all my money is in one lot, then no. I would have had to intially separate my position into many smaller lots, many small positions, and then I can close out as many of those smaller lots as I deem necessary.
Makes sense.
Thanks
Pippy
I also depends on your broker. I use Oanda and with them you can close any fraction of a trade you like.
ie. If you have gone long with a trade worth £50,000 and you want to close half of it, you can simply open a short trade worth £25,000.
Your £50,000 long potision becomes a £25,000 long potision and the other half becomes your profit.
I do this all the time.
Interesting…
didn’t know you we’re a broker…?
What’s the spread you’re operating with…GU for instance…?
Cas, you need more coffee this morning 
I use Oanda too, my position sizes are a lot smaller than that, but I’ve done that too. close part of a position by opening half size position in the opposite direction. Due to the new nfa rules that ban hedging. if you hedge part of a position with Oanda, they basically just close part of your original position. With Oanda you don’t trade lots, you trade increments of base currency.
With Oanda you can base your trades on units of the base currency, ie 100,000 units of GBP/USD instead of 1 lot of GU. So if you have a 100,000 unit long position you can enter a short for 7,000 units and you’d still have 93,000 units long.
Also you can base trades on amount of the base currency of your account. ie Account opened with USD, if you have an open long position for $3,500 you can short for $50.00 and still have a long for $3450.00.
ps maybe interbank FX too…?
I’m not a broker Cas, just a trader. I don’t know why you thought that.
Thanks Simon. I don’t know why I didn’t think of that. lol. When you reverse a portion of your position, that takes on a new ticket number right? And then you just close out that ticket number.
BTW, what’s the process for taking money out of Oanda? How does that work? No sense making money if they don’t let you have it.
Pippy
They only let you take out your money once a year, on your birthday…
Simon, I am simply asking what are the proceedures for withdrawing your funds. I have also read that you can withdraw only once a month without incurring a fee. How easy is the process?
Hi Pippy,
I can’t really help you there as I’ve not taken any money out yet. I’d rather compound any profits I make. But Oanda has a good reputation and during my research to find a broker I never heard of anyone having a problem withdrawing money from them:)
I have withdrawn funds over a grand and had no problems.Recieve the check in about a week.I heard whatever process you use to sent it in to open is the way your going to get it back paypal,check.
Oanda never permitted “hedging” in the same account. One of the reasons I’ve always respected them.
I am curious, why the rules against hedging? To what end? I suppose if you really wanted to do it you could just open two accounts.
Good question actually.
In a ‘previous (trading) lifetime’ I used to use these ‘hedges’ to avoid margin calls (I’ve learned a little since then I’m sure) but ALWAYS the inevitable happened i.e. no sooner was one of the ‘hedged’ positions closed and price continued on its merry way until you were margin called ANYWAY!!! I also remember paying LOADS of interest on these ‘hedged’ positions (sometimes, most times, paying in BOTH directions).
The above being noted I’m interested in the answer myself though i.e. I doubt very much that the new regulations are being introduced in an effort to guard me and others against my (old) habits!!! LOL!!!
Regards,
Dale.
Oanda never had a rule against it. They just handled the accounting for it the way any institution (and any other market outside forex) would - on a net basis. If you’re long 100 EUR/USD and you go short 100 EUR/USD you have no net exposure to the market, thus your position is nil.
That is true. Therefore there would be no real difference between hedging and staying out of the position altogether except for the spread you have to pay.
I’m not 100% about this but my understanding of the US aversion to hedging and the FIFO rules have more to do with IRS code regarding long term cap gains tax vs short term. Hedging and second positions (FIFO) could be used to maneuver a short-term profit into a long-term cap gain. ie: You’ve had a profitable long position for 8 months and is now starting into a down trend. If closed the profit would be taxed at the short-term rate. Holding a short hedge against the long for 4 months and one day would drop it to the long-term cap gains rate.
Opening a second long losing position against the first long position for the same 4 months and one day would then give you a short term cap loss off setting the long-term cap gains on the first position.
So if I understand it correctly, it’s not about brokers charging double spreads as much as it is about taxes. In the US it’s always about taxes!
Thanks!