{"version":"1.0","provider_name":"For overseas forex cashback services, try Money Charger","provider_url":"https://money-charger.com/en/","author_name":"admin","author_url":"https://money-charger.com/en/author/admin/","title":"What is hedging with overseas forex bonuses? A thorough explanation of why it's prohibited and the risks of getting caught - Money Charger, your overseas forex cashback service","type":"rich","width":600,"height":338,"html":"What is hedging with overseas forex bonuses? A thorough explanation of why it's prohibited and the risks of getting caught
\n","description":"\"Is it true that you can make money by hedging using overseas FX bonuses?\" \"I heard it's a trick like arbitrage, but I've also heard rumors that your account will be frozen if you do it...\" For those of you with such questions and concerns, this article will clearly explain the mechanism and risks of \"overseas FX bonus hedging.\" At first glance, hedging using bonuses may seem like an attractive method to make profits with no risk, but in reality, there are strict rules and monitoring systems on the part of the brokers. If you try it without properly understanding it, in the worst case, all your accounts may be frozen and your profits may be confiscated. After reading this article, everything from the essence of bonus hedging to points on how to avoid risks will become clear. ■What you will learn from reading this article By the time you finish reading, you will not only be able to decide whether to \"do it or not,\" but you will also understand the importance of choosing a safe trading strategy for yourself. Please read to the end and use it to manage your FX trading with reduced risk. Beginners are advised to first read the Complete Guide to Overseas FX for Beginners. Is it OK if you don't get caught? What is overseas FX bonus hedging? In overseas FX, \"hedging\" using account opening bonuses and deposit bonuses is attracting attention from some traders. This method aims to limit risk by holding both buy and sell positions simultaneously while using bonuses to aim for profits, but it is prohibited in most cases. In this section, we will explain what hedging is in the first place, how bonuses are involved in trading, and the basic mechanism. The latest overseas FX bonus information is updated regularly on the latest overseas FX bonus campaign ranking here. Hedging is a method of holding both buy and sell positions simultaneously In FX, hedging refers to a method of simultaneously holding both buy and sell positions in the same currency pair. A position refers to everything from the order to the settlement, and if you enter a buy position in USD/JPY, it is called a \"buy position,\" and if you enter a sell position, it is called a \"sell position.\" When hedging is used, both profit and loss will occur regardless of which way the price moves. [When the price rises] [When the price falls] In other words, hedging is an effective method in range-bound markets where the direction is unclear or in times of sharp rises and falls. A range-bound market is when the market repeatedly rises and falls within a certain range, and is also called a \"box market\" or \"sideways market.\" Reference: Daiwa Securities | Explanation of Financial and Securities Terms \"Range Market\" In a range market where prices fluctuate, there is a chance to make a profit on either position by closing the position the moment the loss turns positive. On the other hand, if the market shows a direction, both profits and losses will increase unilaterally, so caution is necessary. How to do Bonus Hedging Bonus hedging is a trading method that utilizes \"bonus credits\" provided by FX brokers to minimize the risk of your own funds while extracting only profits. It is carried out in the following steps. In this way, a \"one-sided structure\" is possible where losses are covered by the bonus and only profits are extracted. However, this method is explicitly prohibited by many overseas FX brokers. The terms and conditions often state that \"hedging using bonuses between multiple accounts or between different brokers is prohibited.\" If discovered, you may face serious penalties such as profit forfeiture, withdrawal refusal, and account freezing. How Bonus Hedging Generates Profits The reason why bonus hedging generates profits is that it is structured in which losses are \"effectively pushed onto someone else's (FX broker's) funds = bonus,\" and you acquire only the profit side without bearing any risk yourself. For example, in this situation, you would end up with only profits without using any of your own money. Naturally, this kind of use is not anticipated by FX brokers. Bonuses are a system intended to support trading for new users, and methods that allow you to take profits without risk are considered clear abuse. For this reason, many brokers prohibit \"hedging between different brokers by the same person\" and \"intentional separation of profits and losses through multiple accounts,\" and you must keep in mind that you will be subject to severe penalties if discovered. Is bonus hedging essentially arbitrage? An explanation of the boundary between illegality and violation of terms and conditions A hedging method using bonuses may look like \"arbitrage (arbitrage trading) that allows you to make profits with no risk\" from the outside. However, in reality, unlike arbitrage as a financial product, it is almost always a form of intentional abuse of the FX broker's bonus system. Here, we will clarify the relationship between bonus hedging and arbitrage, whether it is illegal or not, and the borderline for violation of terms and conditions. Is bonus hedging the same as bonus arbitrage? The hedging strategy using bonuses may appear similar to arbitrage at first glance. Arbitrage is a strategy that profits without risk by taking advantage of price differences between markets. Bonus hedging also eliminates risk with its structure of \"losses are covered by bonuses, profits are withdrawn,\" and is therefore also called bonus arbitrage. However, bonus arbitrage is fundamentally different from true arbitrage. Unlike arbitrage that exploits market inefficiencies, this is a tactic that utilizes the FX broker's system (= bonus) itself. Structure of bonus arbitrage when the market falls (You can scroll horizontally) FX Broker Fund Type Position Result Company A Bonus only Buy Loss → Bonus disappears (no damage) Company B Bonus only Sell Profit → […]"}