FinPros uses a range of automated risk management tools. These tools monitor your account in real time and protect your balance from going below zero. Negative Balance Protection is a standard feature on all our account types at zero cost to you.
When combined with other risk management tools, it helps traders control their risks better.
This means your losses cannot exceed your invested capital. This is core, especially to rookie traders who are not alert to how fast volatile markets may move during certain market sessions. Most traders love high volatility because it breeds opportunities. Too much of it though may not be a good thing, especially if it moves the market against your positions. This is where NBP features kick in to ensure your balance remains positive.
Two main security features keep your account from going into negative balance.
Margin Call: If markets move against your positions and your margin level reaches 100%, we will send you a margin call notification. This is an alert that your positions are in danger due to low margin. That should prompt you to take decisions about your account. You may add more funds to keep your positions going. Or you can close, or partially close, your positions to avoid further losses.
Close-Out: If the market continues to move against you and your margin level drops to 30%, our trading platform will start closing your losing positions. This is to avoid your account balance becoming negative.
Yes. This may happen in rare occasions. When you trade leveraged financial products, highly volatile markets or sharp market movements can send your account into negative balance. And this can happen despite negative balance protection processes like margin close-out. So, what happens if my account balance goes negative? Read on to find out.
If your account balance ever ventures into sub-zero territory, FinPros will offset the negative amount. We will reset your balance to zero and you will not be asked to cover the deficit from your pocket. This applies on each trading account individually, not on the aggregate balance of all the trading accounts you hold with FinPros.
Not every broker gives Negative Balance Protection and Negative Balance Correction. In fact, many account conditions and features that we offer as standard, are not industry standard.