What is Negative Balance Protection?
Negative balance protection means that you can’t lose money than what is in your account. Please note that your entire capital may be in risk. Therefore, you can still lose all your account funds, if you do not set the limits of the loss on your account. So, the customers can/should set personal limits for risk management purposes, which can help to limit losses and maximize profits. Below are the policies which we manage and calculate the negative balance on your trading account.
Pips Market top priority is making your trading experience great by providing negative balance protection to all our clients: Our risk management system ensures that the client cannot lose more than he initially invested. If the balance becomes negative due to Stop Out, Pips Market will compensate the amount and adjust the account balance to zero.
- This policy is only applicable to the customers.
- The customer should maintain the appropriate margin levels in the trading account at all times for the method of risk management.
- To protect the customers from negative balances, customers are provided with certain margin levels. If the margin level of a customer account is equal to or drops below the percentage, positions will automatically be closed at the current market price. If customer don’t want this happens, they can set their personal limits for risk management purposes, which can help limit losses and maximize profits.
- In the event there are certain market conditions which may cause a significant “market gap” and thereby making it possible to incur a negative balance while trading, Pips Market shall absorb the negative balance. The customer should be protected against such loss because the purpose of the negative balance protection provides a help in the case of extreme market conditions.
Pips Market guarantees that your risk is limited only to the funds you have deposited into your account. Please note that the negative balance protection does not include any debt payments from the client. Therefore, our clients are protected from losses beyond their initial deposit.
Debt prevention
No losses beyond initial deposit
Resets back to zero automatically
Situations, when account balance is prone to becoming negative, might take place upon significant economical events, when sudden market movements drastically affect the value of assets. Due to high volatility and price gaps, a customer can lose his/her equity. Pips compensates the account balance to zero.
To prevent your account from meeting negative balance, here are some preventive measures you may use: