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What is a Negative balance protection
What is a Negative balance protection

Learn about the feature that prevents negative balance

Support Team avatar
Written by Support Team
Updated over a week ago

By registering with NAGA every client is also eligible for the Negative Balance Protection which has been implemented by the European Securities Market Authority (ESMA).

➡️ To be more precise, Negative Balance Protection ensures that traders will not lose more than the amount that they have initially deposited.

For example, if a client deposits 500.00 EUR and invests that amount on a trade and then the client closes that trade in 700.00 EUR loss, the balance of the account might go negative -200.00 EUR – which could happen as a consequence of a fluctuation in the price of the underlying instrument when trading with leverage.

However, since all our clients are eligible for the Negative Balance Protection, the client will be protected for the 200.00 EUR difference – meaning that the client will not owe 200.00 EUR to the company.

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