“Negative Balance Protection” literally protects you from “debt”.
How do we protect our clients?
iForex implements a Negative Balance Protection Policy that prevents your account from ever going into minus.
This valuable tool offers protection from extreme volatility.
To be clearer: You will NEVER choose more than you choose to invest.
NBP stands for Negative Balance Protection.
It is very normal, but still the greatest feature(or condition) offered by many Forex brokerage firms.
Let’s break into this service details this time.
What is NBP?
NBP is supported by majority of Forex brokers in the world, but some of them don’t, so you should be careful when you choosing a broker.
If your broker supports “NBP”, then your risk is limited.
As the broker “protects” clients from “negative balance”, these clients don’t need to cover the exceeded losses in their accounts.
The loss is limited to zero, up to the deposit amount he/she made in the account.
What happens if an account balance goes “minus”?
In case your account balance goes minus after “Stop Out”, then your broker fixes the account balance to zero.
The process may be carried automatically, or you may need to request for it to the broker.
It is important to note that, a trader can manage their risks by just reducing the deposit amount in the accounts.
Point – “Stop Out” is also called a “Liquidation”, which closes all existing open positions in order to avoid further losses.
Who covers the “exceeded losses”?
The exceeded losses occurred in an account in this case, will be fixed to zero by the broker.
The cost of this service is completely covered by the broker.
This is one of the reasons why brokers reduce leverages and trading volumes, in case of expected high volatility ahead.
iForex, an European FX broker with over 20 years of experience, fully supports NBP for its traders.
Join iForex now and trade FX, Stocks, Commodities and even Equity Indices with limited risks!