Negative balance protection

Negative balance protection guarantees that a retail client cannot lose more than the money deposited in their CFD account.

Required by ESMA since 2018, and also by the FCA and ASIC, this rule applies account by account. If a sudden move pushes your balance below zero, the broker resets the account to zero and absorbs the difference.

The textbook case is 15 January 2015: the Swiss National Bank dropped the 1.20 floor on EUR/CHF and the pair collapsed within minutes. Stops were filled far from their levels, and many clients ended up with negative balances.

This protection only covers retail clients at a broker regulated in a jurisdiction that requires it. A professional client or an offshore account may not benefit from it.

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