Prop Firm Hedging Calculator
The controversial strategy: Buy two funded accounts, go long on one, short on the other. One blows up, the other gets a massive payout. But does the math actually work?
Because you are placing massive lot sizes to hit 10% in one trade, spreads and commissions will eat into your profits significantly.
Theoretical Net Profit
Complete Guide to Prop Firm Hedging & Arbitrage
The Truth About B-Book Slippage
When you try to reverse trade two prop firm accounts, you are betting that one will hit the profit target while the other hits max drawdown. However, because most prop firms run a B-book model, their liquidity providers employ asymmetric slippage. This means both of your accounts could experience slippage against your entry price during high volatility, causing both accounts to fail simultaneously.
Hidden Rules and IP Tracking
Almost every major prop firm explicitly bans 'reverse arbitrage' or 'hedging between accounts' in their Terms of Service. If they detect identical, opposing trades coming from the same IP address or device fingerprint across different accounts (or even different firms sharing the same liquidity provider), you will be banned and forfeit all fees.
The Cost of Spreads and Commissions
Even if you execute the trades perfectly, the combined cost of the bid-ask spread and commissions on both accounts acts as a constant drag on the strategy. Our calculator proves that unless the prop firm payout structure is mathematically broken (e.g., extremely cheap challenges with 100% payouts), the negative expected value of spreads guarantees a loss over time.
Frequently Asked Questions
Can I buy two FTMO accounts and hedge them against each other?
No. FTMO and almost all other reputable prop firms strictly prohibit reverse trading or hedging between accounts. It violates their terms of service, and they use sophisticated software to detect opposing trades executed at the exact same time.
Does Prop Firm Arbitrage actually work?
Mathematically, it can work if the cost of the challenges is very low compared to the payout, but practically it fails because firms ban the practice, and spreads/slippage cause both accounts to fail during volatile news events.
How do I calculate the profitability of hedging?
You must factor in the cost of buying two challenges, the payout percentage (e.g., 80%), the spread on both trades, and the commission. Our calculator does this automatically to reveal the true net profit or loss.