Negative balance protection: do you know if your broker offers it?
Negative balance protection means you can't lose more than your deposit — your balance can't go below zero. It's required for retail clients in the UK, the EU and Australia, but a broker's offshore entities may not offer it.
Check your own situation and share:
- which entity of the broker your account is with
- whether the terms mention negative balance protection
- whether you've ever actually needed it
The negative balance protection guide explains the rules by region.
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.
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