Are Hedging/Grid Bots Allowed?

I’ve heard it claimed that hedging is not allowed for US traders, as per FIFO rules. Is this true? I’ve been developing a promising grid bot, and that would suck.

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@Troy_Gomez Are you referring to an equity trading strategy where one has both a buy and a sell order open at the same time and potentially both a long and short position in the same stock?

Generally, that isn’t supported by most brokers and definitely not by Alpaca. The issue is holding both a long and short position at the same time. You may be able to do a workaround by trading in two separate accounts. For example short positions in one and long positions in another? However, you probably will be day trading (or at least the potential to day trade) so there would need to be more than $25,000 in each account. The other situation to avoid are “wash trades” (not to be confused with wash sales). This is where one executes both a buy and a sell of the same stock at the same time and potentially trading with oneself. That is strictly prohibited by the SEC and can result in the account getting frozen for 90 days.

yes it is allowed in the markets

Understood. Thanks for the thorough response. My algorithm involved the execution of simultaneous short and longs.