Negative balance protection means that if a sudden move takes your account below zero, you are not required to repay the shortfall. It is a critical safety feature for leveraged trading.
Where it is required
Regulators in several jurisdictions require brokers to give retail clients this protection for leveraged products. Professional clients may not receive it, because the rules treat them as better able to bear risk.
Where it is optional
In other regions the protection depends on the broker's own policy. It may appear in the terms of one legal entity but not another, even under the same brand.
What to check
- Which legal entity opens your account.
- Whether the terms state a guarantee in plain words.
- Whether switching to a professional account removes the protection.
Treat the protection as a safety net, not a strategy. Position sizing is what keeps losses small.
Risk warning: Trading forex and CFDs involves a high level of risk and may not be suitable for all investors. You may lose more than your initial investment.
Topicsleverageprotectionretail-clients