Negative balance protection

Negative balance protection explained

Here we explain what negative balance protection means for your funds and why you should care.

Trading example

Let’s say that you deposit A$2000 and go long the AFTERPAY share with 5:1 leverage. The value of your position is $10,000. An unexpected market event causes the price to drop rapidly by 8% beyond your margin call close out level. You suffer a 30% loss due to leverage, meaning a total loss of A$3000.

Scenario A

Broker WITHOUT negative balance protection

If you place this trade with a broker that doesn’t offer negative balance protection, you will owe A$1000. The broker has the right to take action against you in order to collect the amount owed.

Scenario B

Broker WITH negative balance protection

A broker who offers negative balance protection has risk management tools in place that prevent your account from going below zero. You will only lose your initial deposit and the broker will absorb the loss.

Your total balance is protected with us

At Qtrade, we understand that no risk management rule can protect traders from extreme volatility during announcements, market openings and unexpected global events. That’s why we take the responsibility to protect your total balance* with Qtrade from going negative.

  • Get peace of mind

  • Free of charge 

  • No opt-in required

Legal: Qtrade Limited is incorporated in St. Vincent & the Grenadines as an International Business Company with registration number 25238 IBC 2018.

  • This website is operated by:
  • Qtrade Limited (SVG)  with registered address Suite 305, Griffith Corporate Centre, P.O. Box 1510, Beachmont Kingstown, St. Vincent and the Grenadines.

High Risk Warning: Trading Contracts for Difference (CFDs) on margin carries a high level of risk and may not be suitable for all investors. Before deciding to trade Contracts for Difference (CFDs), you should carefully consider your trading objectives, level of experience and risk appetite. It is possible for you to sustain losses that exceed your invested capital and therefore you should not deposit money that you cannot afford to lose. Please ensure you fully understand the risks and take appropriate care to manage your risk.