Why cashback Matters Even for Hedging and Arbitrage Traders

Hedging and arbitrage aren’t about predicting market direction — they’re about exploiting tiny inefficiencies.
When your average trade may capture just a few pips, trading costs become the make-or-break factor.

That’s why Forex cashback is critical for these strategies.
Even if you hedge two opposite positions or arbitrage between brokers, cashback lowers your effective transaction cost on every leg of the trade — converting a breakeven setup into a profitable one.

Both strategies depend on frequent, high-volume execution.

• Hedgers open offsetting positions to reduce risk exposure.
• Arbitrage traders exploit price differences between instruments or brokers.

But each trade involves two or more simultaneous entries, meaning:

• Double the spreads or commissions
• Higher margin requirements
• Smaller per-trade profit windows

Example:
You open a buy and a sell of 1 lot each on EUR/USD.
If your broker charges $7 per lot, your total round-turn cost is $14.
Unless the price diverges favorably, you’re down before you start.

Why rebates are perfect for market-neutral systems

1. Works on Both Sides of the Market
   Whether you’re long or short, each side earns its own rebate — no directional bias.
2. Improves Breakeven Threshold
   Lower per-lot cost means you need fewer pips to turn positive.
3. Scales with Volume
   The more trades you open, the larger your cumulative cashback income.
4. Works with EAs and HFT Systems
   Automated arbitrage or hedging bots benefit from consistent, volume-based rebates.
5. Zero Extra Risk
   Cashback is a refund, not a bonus or leverage — you’re simply earning back what you already paid.

Hedging example: Turning a neutral strategy profitable

A trader runs a long-term hedge on EUR/USD and GBP/USD with both legs open for weeks.
Without rebates, swap and commission slowly erode equity.
With FCBR cashback:

• Each trade still earns $2 per lot per week in rebates
• Over a month, total rebate offsets a large portion of holding and spread costs

The strategy’s “neutral” portfolio now becomes slightly net-positive, thanks entirely to cashback inflows.

Pro tip: Use cashback as a stability buffer

Market-neutral traders can treat rebates as operational yield — a consistent return that cushions volatility or drawdown periods.
Think of it as “baseline income” that your system earns automatically, regardless of performance variance.

Compounding the advantage

If you reinvest monthly rebates into your account:

• Your equity base grows
• Position sizes can scale slightly higher
• Total rebate income compounds month after month

Over a year, consistent cashback can equal 3–5% additional ROI on your total balance — purely from trading activity.