Trading Rules
Hedging
Holding offsetting positions to reduce risk, like long and short the same or correlated products. Many prop firms ban hedging within an account or across accounts.
In plain English
In a prop context, hedging usually appears as two banned patterns: holding long and short the same instrument across two of your accounts (guaranteeing one account profits at the other's expense), or offsetting positions inside one account to game a consistency or drawdown rule.
Cross-account hedging is treated especially harshly because it converts evaluation fees into near-certain funded profits. Legitimate correlated-product hedging is allowed at some firms; the terms page is the only reliable source.
- Trader holds long ES in account A and short ES in account B.
- Whatever the market does, one account passes its target.
- Firms detect and ban exactly this.