The following is a guest editorial courtesy of the expert content team at leading broker technology provider Leverate.
Understanding how your brokerage handles client positions isn’t just helpful, it’s essential. Two of the most critical models in the industry? Netting and Hedging. If you’ve been around trading platforms or broker dashboards, you’ve probably seen these terms thrown around as everyone should already know what they mean. But the question is, do you actually know how they work or why they matter?
Netting: Simplicity at Its Core
Imagine you’re juggling a few trades in the same direction on EUR/USD. One’s a buy, one’s a sell. With netting, your positions are consolidated into a single one. If you bought 2 lots and sold 1 lot, your final position is just 1 lot long. It’s like having one balance sheet for all your trades, neat,…
Read More
