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Execution & tools

Netting

By Jarosław Wasiński • Published: • Updated:
A position-accounting method that combines trades in the same instrument into one net position. Opposite trades reduce, close or reverse that position instead of necessarily opening a separate hedge.
Example. On a netting account, buy 0.30 lot EUR/USD, then sell 0.10 lot: the remaining position is long 0.20 lot. Selling another 0.25 lot closes that long and leaves a short 0.05 lot, assuming complete fills.

Netting versus a hedging account

A hedging account can keep separate long and short tickets in the same instrument. A netting account combines exposure. The word hedging can also describe an economic risk-reduction strategy; it is not just a platform setting.

Common mistake

An opposite order may realise part of the existing position’s result rather than create a separate position. Stop-loss and take-profit inheritance, margin offsets and fees depend on the platform and broker.

Apply it

Check the accounting mode before using an Expert Advisor or copying an order workflow. Confirm how partial closures and reversals appear in the trade history. MetaTrader 5 documents both accounting systems.

FAQ

Does an opposite deal always open a hedge?

No. In netting it first reduces, closes or reverses the net position in the symbol. Check the confirmed resulting quantity.

Can netting make gross trading costs disappear?

No. Combining exposure does not erase the charges and realised results of the individual executions.

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Jarosław Wasiński

Editor-in-chief, ForexMechanics.com • Macro & FX analyst

Independent analyst and practitioner with over 20 years of experience in financial markets. Actively involved in Forex since 2007, with a focus on fundamental analysis, OTC market structure, and disciplined capital risk management.

  • Creator and editor-in-chief of MyBank.pl, providing reliable financial education since 2004.
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All content is educational and informational only – it does not constitute investment advice or a recommendation. Remember: leveraged trading (Forex/CFD) carries a high risk of rapid capital loss.