Prop Firms That Allow Hedging

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Category: Trading Guides | Author: Trading Brokers | Date: July 8, 2026

Introduction

Proprietary trading firms (prop firms) that permit hedging strategies provide traders with enhanced flexibility to manage risk and optimize returns. Hedging involves taking offsetting positions in correlated assets to reduce directional exposure. This article examines several firms known to support hedging, detailing their eligibility criteria, account structures, and trading rules.

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FTMO

FTMO permits hedging across its account types. Traders may open opposite positions on the same instrument or correlated markets under defined risk limits. The evaluation process is two-phased: an initial challenge with profit and drawdown targets, followed by a verification stage. Profit splits can reach up to 90%. Risk parameters—including maximum drawdowns and daily limits—must be observed even while employing hedging strategies.

The5ers

The5ers offers full hedging capabilities in both standard and swing-style funding accounts. Traders may hold long and short positions simultaneously in related currency pairs or instruments. Evaluation is typically one-step, with the option to scale up account sizes as consistent performance is demonstrated. Profit splits may reach up to 95%. No fixed timeframe is imposed to meet profit goals, though drawdown rules still apply.

FundedNext

FundedNext removed its hedging prohibition across all programs. Hedging is now permitted in both evaluation and live funding stages. Traders are free to utilise long and short positions concurrently. Risk and profit rules still apply, and traders must adhere to drawdown limits. Evaluation is streamlined, and account sizes scale based on performance.

Blue Guardian

Blue Guardian supports full hedging capabilities. Traders can simultaneously hold contrasting positions on similar instruments as part of risk management or arbitrage strategies. The firm features a competitive evaluation process without strategy restrictions. Flexibility in lot sizes, instruments, and timeframes is provided, subject to standard risk management rules.

Comparison of Hedging Capabilities

Prop Firm	Evaluation Model	Hedging Allowed	Profit Split	Strategy Restrictions
FTMO	Two-stage Challenge	Yes	Up to approx. 90%	Standard risk rules apply
The5ers	One-step / Swing account	Yes	Up to approx. 95%	Drawdown and size limits
FundedNext	One-stage evaluation	Yes	Scalable splits	No hedging restrictions
Blue Guardian	Flexible evaluation	Yes	Standard profit share	No strategy restrictions

Risk Management While Hedging

Even though hedging is allowed, all firms enforce strict risk limits. These typically include maximum daily loss caps, overall drawdown thresholds, and position-size controls. Traders must remain within these parameters while employing hedging strategies. Violating risk limits, regardless of hedged exposure, may result in account termination or loss of funding privileges.

Trading Platforms and Instruments

These firms operate on popular platforms such as MetaTrader 4, MetaTrader 5, and cTrader. Hedging is supported on these platforms but configuration can vary; for instance, MetaTrader 4 accounts often default to hedging-disabled, so it’s important to select the correct account type. Hedgeable instrument types usually include FX pairs, CFDs, indices, and commodities. Traders should confirm the instrument eligibility ahead of engagement.

Suitable Trader Profiles

Prop firms that allow hedging cater particularly to traders who:

• Employ arbitrage or market-neutral strategies (e.g. currency pair hedging)
• Trade correlated instruments simultaneously to reduce risk
• Use automated systems or expert advisors running hedged setups
• Prefer diverse instruments and want full strategy flexibility

These firms typically have no prohibition on scalping, hedging, or expert advisor use in their rules.

Account Scaling and Growth

Many firms offer account scaling after consistent performance. Profit milestones unlock higher capital access, sometimes up to multi‑hundred‑thousand dollar accounts. Hedging permission remains intact across levels, but risk targets scale proportionally. Traders must maintain consistent risk discipline at each level to qualify for scaling.

Conclusion

Several reputable proprietary trading firms explicitly support hedging as a part of funded trading strategies. FTMO, The5ers, FundedNext, and Blue Guardian each offer hedging permissions, while establishing transparent risk and evaluation frameworks. Traders interested in hedged strategies should ensure that account types and platforms fully support hedging, and they must strictly adhere to drawdown and risk controls even while offsetting exposures.

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