Can I lose more on Forex than I deposit?

External question — Personal Finance Stack Exchange Author: Peter Original post: https://money.stackexchange.com/questions/79789 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. My question would be simple: if I mess something up in online Forex really badly, can I lose more money than I deposited? (e.g. lose my house, gain a debt)

External answer — Personal Finance Stack Exchange Author: Mike Scott Original post: https://money.stackexchange.com/a/79790 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. It's the same as with equities. If you're just buying foreign currencies to hold, you can't lose more than you invest. But if you're buying derivatives (e.g. forward contracts or spread bets), or borrowing to buy on margin, you can certainly lose more than you invest.

External answer — Personal Finance Stack Exchange Author: geo1230 Original post: https://money.stackexchange.com/a/79791 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. If you don't use leverage you can't lose more than you invested because you "play" with your own money. But even with leverage when you reach a certain limit (maintenance margin) you will receive a margin call from your broker to add more funds to your account. If you don't comply with this (meaning you don't add funds) the broker will liquidate some of the assets (in this case the currency) and it will restore the balance of the account to meet with his/her maintenance margin. At least, this is valid for assets like stocks and derivatives. Hope it helps! Edit: I should mention that I'm not an expert Always be cautious and know what you are doing when investing in the stock market/FX/etc.

External answer — Personal Finance Stack Exchange Author: Peacock Original post: https://money.stackexchange.com/a/79794 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. FX is often purchased with leverage by both retail and wholesale speculators on the assumption daily movements are typically more restrained than a number of other asset classes. When volatility picks up unexpectedly these leveraged accounts can absolutely be wiped out. While these events are relatively rare, one happened as recently as 2016 when the Swiss National Bank unleashed the Swiss Franc from its Euro mooring. You can read about it here: http://www.reuters.com/article/us-swiss-snb-brokers-idUSKBN0KP1EH20150116

External answer — Personal Finance Stack Exchange Author: borjab Original post: https://money.stackexchange.com/a/79841 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Contrary to what other people said I believe that even without leverage you can lose more that you invest when you short a FX. Why? because the amount it can go down is alwasy limited to zero but it can, potentially, go up without limit. See This question for a mored detailed information.