Is it possible to have a negative balance in my Forex trading account?

Asked 4 years ago

I've just about run my trading account into the ground, and I'm wondering if CFDs can go into a negative balance. What happens then? Will I still be able to trade? Would that mean I owe Forex money?

Account balance Negative cash balance Trading account

Andrew Moran

Monday, September 20, 2021

Yes, there are many instances when you could have a negative balance in your forex trading account. This could apply if there are no brakes, such as margin calls and stop losses, to stop abnormal and immense declines. 
Whether you are trading leverage products or on the margin, your account could slump below zero. Some entities will not allow you to trade until your account is funded again. And, yes, if you are in subzero territory, you will owe the platform.
Depending on platform you are using, some companies, like eToro or Pepperstone, offer their users negative balance protection. This means that your loss cannot surpass the deposited a specified amount.