Negative balance protection ensures you cannot lose more than the money in your account, even if a violent market move blows past your stop. The broker absorbs any shortfall. It is required by many regulators and is an important safety feature for retail traders using leverage.
Forex Term
Negative Balance Protection
A safeguard stopping your account from going below zero.
Example
If a gap wipes out your balance, negative balance protection resets it to zero rather than leaving you in debt.
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Risk
Forex and CFD trading involves significant risk of loss and is not suitable for all investors. Leverage can work against you. This content is educational and not financial advice — always do your own research.