Is Hedging Allowed at AquaFunded?
The Simple Answer
Yes, on a single account. AquaFunded allows hedging within one account, so you can hold opposite buy and sell positions on the same instrument together. However, hedging across multiple accounts is prohibited.
What Is Allowed and What Is Not
How Hedging Works at AquaFunded
AquaFunded keeps the boundary simple. A hedge held inside one account is treated as legitimate risk management, so opposite positions on the same instrument can sit together as long as they share a single account. Therefore a same account hedge is not the target of the rule.
The prohibition applies across accounts. Specifically, opposite positions on the same instrument spread over two accounts are prohibited. As a result, netting exposure across accounts falls outside the rules.
In practice the intent matters. Moreover, a hedge that stays on one account and manages a genuine position is what the rule is designed to allow, while a coordinated offset across accounts is what it is designed to stop.
What Counts as a Breach at AquaFunded
Cross account hedging is the breach. AquaFunded lists hedge arbitrage among prohibited strategies, so an arbitrage style hedge can be actioned.
By contrast, a hedge kept inside one account is permitted and does not breach on its own. Ultimately the safe path is to hold both legs on the same account and avoid coordinating opposite positions across accounts.
Final Comments
Overall, AquaFunded is comfortable with single account hedging and firm against anything spread across accounts. In short, keep both legs on one account and the hedge stays compliant, while cross account hedging is prohibited. By contrast, AquaFunded is otherwise light on restrictions, allowing martingale and no stop loss, so the main hedging limit is the ban on hedge arbitrage and cross account offsets.
Related Pages
FAQ
Is hedging allowed at AquaFunded?
Yes, within one account. You can hold opposite buy and sell positions on the same instrument on a single account. Hedging across multiple accounts is prohibited.
Can I hedge across two AquaFunded accounts?
No. Opposite positions on the same instrument spread across accounts are prohibited.
Is hedge arbitrage allowed at AquaFunded?
No. Hedge arbitrage, reverse arbitrage and latency arbitrage are prohibited, even though a same account hedge is allowed.
What happens if I hedge across accounts at AquaFunded?
AquaFunded lists hedge arbitrage among prohibited strategies, so an arbitrage style hedge can be actioned.