In this article, we explain how to prevent positions in the same instrument and in opposite directions (Long/short or bought/sold) from reducing or cancelling each other.
- End-of-day FIFO netting (Legacy mode): Related orders
- Real-time FIFO netting (Recommended mode): 'Force Open' & related orders
- How to enable 'Force Open'?
Warning
Keeping positions open with opposite directions overnight can incur financing costs.
For example, when force open is enabled, the position is not closed and will not net out, therefore it will have an impact on the margin calculation.
You can choose whether a position is available for netting using the 'Force Open' feature and related orders. This gives you control over how position netting is applied to single trades.
End-of-day FIFO netting (Legacy mode): Related orders
A related order will result in its associated position not being available for netting.
Please note that End-of-day (EOD) First-in first-out (FIFO) is a legacy netting mode which will be phased out in future. If you want to avoid netting, you should consider switching to real-time FIFO netting mode.
N.B.: The 'Force Open' feature outlined under real-time FIFO netting is not available using the EOD FIFO netting mode.
Real-time FIFO netting (Recommended mode): 'Force Open' & related orders
FX spot and CFD positions created with 'Force Open' set to ON will allow for positions with opposite directions to be held in the same instrument, such that they will not net each other out. This feature is only available with the real-time FIFO netting mode.
How does the 'Force Open' feature work?
The 'Force Open' status can be set when placing the order. The 'Force Open' status cannot be switched on for existing positions after trade execution. Additionally, turning off the 'Force Open' status for an existing position is irreversible.
- The 'Force Open’ status allows you to hold individual long and short positions in the same instrument.
- With the 'Force Open' status set to ‘on’, individual positions can be closed separately.
- Related orders can be placed against individual positions when the 'Force Open' status is ‘on’.
- Stop and Limit orders placed via the “Add” button on the Net Positions will not automatically remove Force Open from all the positions under the Account.
- The 'Force Open' status for individual positions can be turned off in the Positions module. This will make such positions available for immediate netting using the FIFO (First-in, First-out) Netting Method, and will close eligible open positions in the order of their creation date/time, starting with the oldest. Turning off the 'Force Open' status is irreversible and will also cancel related orders. Once the position is netted, it is shown under Closed Positions.
N.B. Any position opened prior to enabling the 'Force Open' feature will be created with the 'Force Open' status set to OFF. In the event of a Close Out, the 'Force Open' status of remaining positions will automatically be switched to OFF.
Specific for CFDs
Please note that in the event of a stock split/reverse split or symbol change of underlying shares for CFD positions, the ‘Force Open’ setting on positions will be turned off automatically and such positions will be netted. The ‘Force Open’ settings will not be replicated on new positions as corporate actions are processed based on net positions (and not individual positions) on each account.
How to enable 'Force Open'?
- Log in to your account
- Go to the menu
> Settings > Platform settings > Platform > Position netting
Ensure that Real-time FIFO is selected under Position netting.
Note: Real-time netting can’t be enabled if you hold open positions with related orders. If you try to enable real-time netting while holding open positions, you may come across the error below.
In order to enable real-time netting you must first remove related orders.
3. Check Show force open in ticket and positions
N.B.: Also checking Enable force open of positions by default will automatically set the ‘Force Open’ status to ‘on’ for any new FX or CFD orders.
Once Show force open in ticket and positions is checked, the ‘Force Open’ field will be visible in the Trade Ticket and Positions module: