The Arbitrage process begins when a client books a Forex deal with their respective Forex Intermediary. When booking a deal, a client converts their South African Rands (ZAR) to US Dollars (USD). The moment this deal is booked, the client will be exposed to Forex movement. For example, if the Rand strengthens right after booking a deal, the USD the client has will now be worth less than it was earlier. If the Rand Weakens, the client's USD will now be worth more. The problem is that there is no way of knowing if the Rand is going to strengthen or weaken.
This is where Hedging comes into play. If you have selected the hedge option (which is the default when registering on Koinexpert.com), then it does not matter if the Rand strengthens or weakens because we lock your deal in immediately the moment we receive your booking confirmation. If the rand would strengthen or weaken, it would have no impact because we have already concluded your trade. This makes hedging less risky than the alternative.
The alternative is choosing the Batch option, which means that we will not lock in your deal when we receive your deal confirmation. Instead, your funds will only be traded once they arrive in our bank account later that day, or if for some reason there are delays, only the next day. During this time, your USD will either gain value or lose value compared to the Rand, depending on how the market moves. If the Rand strengthens, your Dollars will be worth less than it was the morning when you booked and you could make a much smaller profit and possibly even a loss. That is why this is the more risky option. However, there is a reason this option exists and that is if the Rand was to weaken, you could make a much higher profit. Therefore, this option is mostly used by experienced traders and often traders who also do Forex Trading and understand the movement of the Dollar against the Rand.
To compare the results of these two methods, please check out the Performance Page.