Under normal conditions, positions are closed automatically at a 50% margin level to prevent losses. However, extreme market events may cause worse closing prices and negative balances. CFDs are leveraged, increasing both profits and losses. Negative Balance Protection ensures you won't owe negative balances, but using risk management tools like stop-loss orders is strongly recommended.
Why this can happen
| Reason | Explanation |
|---|---|
| Market gaps | Prices may move past stop-loss or stop-out levels without executing at each price level. |
| High volatility | Prices can move rapidly before orders are executed. |
| Low liquidity | There may not be enough liquidity to close positions at the expected price. |
| Leverage | Leverage increases exposure and can magnify losses. |
Negative Balance Protection
You will not be liable for any negative balance in your trading account due to our negative balance protection measures. However, we strongly advise using risk management tools such as stop-loss orders and regularly monitoring your margin level to help manage your exposure.
Important notes
- CFD trading is high risk and may result in losses greater than the initial deposit.
- Stop-loss and stop-out tools do not guarantee protection against all losses.
- Clients should understand trading risks before opening positions.