Brokers and Negative Balance Protection
Brokers and Negative Balance Protection
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Enrique · External communityPost link
External question — Personal Finance Stack Exchange
Author: Enrique
Original post: https://money.stackexchange.com/questions/126878
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
I'm a bit confused about the Negative Balance Protection offered by many brokers, specially when they allow leverage, and a lot of leverage (common in brokers with CFDs).
How are they protecting against the losses?
For example, if I buy Apple using 10X leverage, and the gap (open market) at the next day is 15% negative, Who is paying the extra 5% of that loss?
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Quoted from Forex.com.bd-Editorial External question — Personal Finance Stack Exchange Author: Enrique Source score (net votes, not local likes): 1 Original post: https://money.stackexchange.com/questions/126878 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I'm a bit confused about the Negative Balance Protection offered by many brokers, specially when they allow leverage, and a lot of leverage (common in brokers with CFDs). How are they protecting against the losses? For example, if I buy Apple using 10X leverage, and the gap (open market) at the next day is 15% negative, Who is paying the extra 5% of that loss?
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