Have you lived through a broker failure?

FTC Community TeamStaff17 Sept 202614 views

When a broker fails, clients learn the hard way which jurisdictions protect them. The stories are rare, painful and enormously instructive for everyone else.

Have you lived through a broker failure? — risk-reward diagram — A risk-reward ratio of 1 to 2

If it happened to you:

the broker and the regulator
how you found out and what the process was
whether you recovered anything, and how

Have you lived through a broker failure? — candlestick anatomy diagram — The parts of a candlestick: wick, body, open and close

The client money guide explains what should happen.

Background: Negative balance protection, client money and compensation schemes

What happens to your money if a trade goes badly wrong, or if your broker goes bust? The protections that apply in the UK, EU, Australia and the US, and their limits.

Can I lose more than my deposit trading forex?

Retail clients of brokers regulated in the EU, UK and Australia have negative balance protection, which caps losses at the account balance. With brokers not bound by those rules, a large gap could leave you owing money.

Is my money protected if my broker goes bust?

It depends on the company's regulator. Client money should be segregated, and schemes such as the UK's FSCS (up to £85,000) or Cyprus's Investor Compensation Fund (up to €20,000) may cover eligible claims. US forex accounts aren't covered by SIPC.

Read the full guide

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