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Top 5 Brokers with Negative Balance Protection

Protect yourself through negative balance protection. These brokers will prevent your account from entering negative territory.

#1
AvaTrade
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79% of retail CFD accounts lose money

AvaTrade (AvaTrade.com) is an award winning online broker. Access a wide range of markets spanning Forex, crypto-currencies, shares, metals and more on competitive spreads.

  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD), Commodities (CFD), Bonds (CFD)
  • Platforms: MetaTrader 4, MetaTrader 5, Copy trading
  • Regulators: Australia, BVI, Ireland, Japan, South Africa, UAE
  • Incorporated: 2006

$100
deposit

1:400
leverage

Instant
execution

$100
deposit

1:30
leverage

Instant
execution

$100
deposit

1:400
leverage

Instant
execution

$100
deposit

1:30
leverage

Instant
execution

$100
deposit

1:400
leverage

Instant
execution

#2
FxPro
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79.78% of retail CFD accounts lose money

FxPro (FxPro.com) is a global broker, winner of 60+ awards including "Best FX Provider" in the 2019, 2017 and 2016 Online Personal Wealth Awards.

  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD), Commodities (CFD)
  • Platforms: MetaTrader 4, MetaTrader 5, cTrader, Copy trading
  • Regulators: Bahamas, E.U., South Africa, UK
  • Incorporated: 2006

$500
deposit

1:500
leverage

Instant
execution

$500
deposit

1:500
leverage

Market
execution

$500
deposit

1:500
leverage

Market
execution

$500
deposit

1:500
leverage

Market
execution

#3
HotForex
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HotForex (HotForex.com) is an award winning Forex and commodity broker, providing trading services and platforms to both retail and institutional clients.

  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD), Commodities (CFD), Bonds (CFD)
  • Platforms: MetaTrader 4, MetaTrader 5, Currenex, Copy trading, Mirror trading
  • Regulators: E.U., France, Germany, Mauritius, South Africa, UK
  • Incorporated: 2010

$5
deposit

1:1000
leverage

Market
execution

$100
deposit

1:500
leverage

Market
execution

$100
deposit

1:500
leverage

Market
execution

#4
eToro
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75% of retail CFD accounts lose money

Buy shares outright or trade CFDs on shares, indices, Forex, cryptocurrencies and more*. Connect with over 6 million other investors, follow or copy their trades in real-time on eToro.com.

  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD), Commodities (CFD)
  • Platforms: Copy trading
  • Regulators: Australia, E.U., UK
  • Incorporated: 2007

$400
deposit

1:30
leverage

Instant
execution

$1000
deposit

1:30
leverage

Instant
execution

$10000
deposit

1:30
leverage

Instant
execution

$400
deposit

1:400
leverage

Instant
execution

What is negative balance protection?

In the summer of 2018, the European Securities and Markets Authority (ESMA) required that EU-regulated CFD brokers provide retail investors with "negative balance protection". So what does negative balance protection (NBP) mean? We turned to ESMA's definition for specifics, and placed emphasis on words we consider particularly important.

"Negative balance protection means firms must limit the retail client’s aggregate liability for all CFDs connected to a CFD trading account to the funds in that CFD trading account. This implies that a client can never lose more money than the funds specifically dedicated to CFD trading."

ESMA's definition tells us that negative balance protection applies at the account rather than at the trade-level, across all and only CFD positions. If your account also holds shares or units in exchange traded funds, they will not be covered by ESMA's guidelines, unless your broker choses otherwise.

Funds held in a CFD trading account are defined as cash as well as any unrealised net profits across open CFD positions. If you are unable or unwilling to meet a margin call, your broker will close your positions at their current market price. This is known as "close out" or "stop out", in an attempt to realise your profits and cap your losses.

On rare occasions, large market events can cause sudden changes in prices which prevent some of these automatic protections from being effective. When markets are volatile, stop outs can experience delays. "Gapping" can arise when prices drop sharply, creating a wedge between expected and actual prices. Leverage also has the potential to magnify losses. In the past, you would have been liable for the entirety of these losses, which may, in some cases, have exceeded your investment. Nowadays, negative balance protection means that your broker will ultimately cover your losses, should they exceed the funds in your CFD trading account.

What brokers say about negative balance protection

Some brokers have applied the law to the letter, offering negative balance protection only to retail investors trading with their EU-regulated entities. However, some have gone above and beyond. We've reviewed how some leading brokers have implemented these protections.

eToro

As is required by law, eToro.com extends negative balance protection to CFD trading accounts held by retail investors. If you are a retail client, eToro ensure that you do not lose more money than what you have deposited into your account when you trade CFDs. Furthermore, if you are a French resident, eToro will ensure that you do not lose more money than you have deposited for each individual CFD trade, as the law so requires in that country.

FxPro

FxPro.com offers negative balance protection for all clients, regardless of their categorisation and jurisdiction. The company also provides a stop out level, which will cause trades to be closed when a certain margin level percentage is reached. The stop-out level will depend on the account type and jurisdiction under which you are registered.

AvaTrade

Likewise, AvaTrade.com provides negative balance protection for all clients, regardless of their categorisation and jurisdiction. This applies across all its entities, whether they are regulated in Europe, the British Virgin Islands, Australia, South Africa, Japan and Abu Dhabi. AvaTrade allows you to trade Forex and CFDs on a wide range of asset classes on the MetaTrader 4 and 5 platforms.

Best Execution

LQDFX

Gold Account [Islamic]

Trade up to 71 currency pairs as well as CFDs on metals, commodities and indices through MT4. STP ... More

  • $20 deposit
  • 1:300 leverage ?
  • 1.1 pips EUR/USD
Best Conditions

AvaTrade

Islamic Account [BVI]

Trade a wide range of financial instruments with a Shariah compliant account. AvaTrade does not ... More

  • $100 deposit
  • 1:400 leverage ?
  • 1.9 pips EUR/USD
79% of retail CFD accounts lose money
Best Platform

HotForex

Islamic Account

Trade Forex as well as CFDs on cryptocurrencies, shares, indices and metals on floating spreads ... More

  • $100 deposit
  • 1:500 leverage ?
  • 1.2 pips EUR/USD
Pro Account

eToro

Islamic Account [EU]

Trade 47 currency pairs, crypto-currencies, popular stocks, indices, gold and silver with no ... More

  • $1000 deposit
  • 1:30 leverage ?
  • 3 pips EUR/USD
75% of retail CFD accounts lose money