Hedging originally refers to a trading method that uses different investment products to operate at the same time to offset risks or achieve arbitrage. Locking is to open a position in the same variety in the opposite direction at the same time, and the two positions lock the risks with each other. In foreign exchange transactions, hedging and hedging usually express the same meaning. In the trading of stocks, futures or options, hedging and locking are completely different meanings. There are different rules for the margin occupied by foreign exchange hedging. There are three situations: no margin, unilateral margin and bilateral margin. Take unilateral occupation as an example: for example, if you make a 1 lot of a currency pair and occupy a margin of 1000 USD, then shorting the 1 lot of the currency pair at the same time will not increase the margin to 2000 USD, but keep 1000 USD unchanged.

It should be noted that when locking a position, if the market spread increases (possibly due to rapid fluctuations or light trading), the net account value will decrease accordingly. If the level of funds in the account is too low, the lock may be broken (or forced to close the position) due to the widening spread. Why enlarge the locking time difference and reduce the net value? This is easy to understand, spread = seller's lowest quotation asking price-buyer's highest quotation. Under normal circumstances, the purchase price and the selling price rise or fall at the same time (the price difference remains unchanged), at this time, the two lock orders just cancel each other out and the net account value remains unchanged. We can assume that the bid remains unchanged and the asking price rises, resulting in a larger spread. At this time, the profit and loss of multi-position positions have not changed, but short positions have shrunk due to the rise of ASK, so the total net value of the account has shrunk.

According to the latest regulations of NFA, account hedging (locked transaction) is not allowed after May 15, 2009, and foreign exchange dealers who are not regulated by NFA or in the United States are not affected.