In short
- Retail clients' CFD losses are limited to funds in the CFD account.
- Applies per account.
- Works alongside the 50% margin close-out.
How it works
If a sudden gap or extreme move pushes your CFD account below zero, the broker must reset the balance to zero rather than ask you to pay the difference. Before these rules, events like the 2015 Swiss franc shock left some traders owing brokers large sums.
Example
You have €2,000 in your account and hold a large EUR/CHF position. An unexpected central bank decision gaps the price, and the position closes with a €2,600 loss. Your balance would be −€600; with negative balance protection it's reset to €0.
Limits
- Professional clients aren't automatically covered.
- Offshore entities may not offer it.
- It protects against owing money — not against losing your whole balance.
Frequently asked questions
Is negative balance protection mandatory in the EU?
Yes, for retail clients trading CFDs with EU-authorised firms.
Does it apply to offshore brokers?
Only if the offshore firm chooses to offer it. EU rules don't bind non-EU entities.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.