GAP Risk
2015 was a particularly volatile year in the foreign exchange markets. The Swiss National Bank decided to remove a 3 year old peg in January which triggered unprecedented volatility, causing many brokers to go out of business, while others scrambled for bailouts. Meanwhile many traders were left unaware as to whether their Brokers would demand payment for negative balances.
Negative Balance Protection
When forex trading, I could tolerate losing money that I have set aside in a Brokerage account and can afford to lose. However, going into debt is unacceptable. Negative balance protection ensures that traders who possess losing positions don’t enter into a negative balance in their forex trading account. When trading without a “Guaranteed Stoploss”, I consider Negative Balance Protection to be essential. I believe it is wise to get written confirmation from the Broker that they Guarantee my account will never result in a negative balance no matter what the trading circumstances are. I keep a record of this communication and ensure that my account manager knows that I consider this to be an essential level of protection for my account. I believe that it is also wise to get a copy of the Brokers terms and conditions to ensure they offer Negative Balance Protection. I also check which Regulator the Broker operates under and checks with the Regulator in question that the Broker is authorised to operate with them. I personally live within the UK so tend to pick brokers that are regulated by the FCA.
Brokers Offering Negative Balance Protection
The following is a list of Brokers that I have researched on the Internet that may offer negative balance protection. I have not confirmed this with the Brokers in question and this list may of course go out of date.
| Broker | Regulation | Country |
| FXTM | CySec | Cyprus |
| easyMarkets | CySec, ASIC | Cyprus, Australia |
| FxPro | FCA, CySEC, DFSA, FSB | UK, Cyprus, UAE, South Africa |
| FX Choice | IFSC | Belize |
| XTB | FCA | UK |
| Forex.com | CFTC/NFA, FCA, ASIC | US, UK, Australia, Canada, Japan |
| Trading 212 | FCA, CySec, FSC | UK, Cyprus, Bulgaria |
| Ayondo | FCA, BaFin | Germany, Uk |
| Plus500 | FCA, CySEC, ASIC | UK, Cyprus, Australia |
| ActivTrades | FCA | UK |
| IronFX Global | CySec | Cyprus |
| JFD Brokers | CySec | Cyprus |
| City Credit Capital (cccapital.co.uk) | FCA | UK |
| ArgusFX | CySEC | Cyprus |
| 365invest | CySEC | Cyprus |
| Berstein Bank | BaFin, Bundesbank | Germany |
| Evolve Markets | No | SVG |
| Finmarket | CySEC | Cyprus |
| FXMarker | IFSC | Belize |
| N1CM | VFSC | Vanuatu |