Alpari UK - possible to lose more than the deposit

Broker Discussion Forex Brokers
1

Hi ALL,

I’m looking for broker based in the UK offering fx micro account.

I find alpari uk however they state in there terms and condition that I[U] can lose more than the deposit[/U].

Is this the standard for all brokers ?

Risk Warning
19. It is important that Eligible Clients are aware that their risks are not limited to the deposit and that by making a qualifying trade it is possible to lose more than the deposit. In some circumstances, losses may be considerably more than any initial or minimum deposit.

Date
20. These Terms and Conditions are dated 26 March 2010.

3

Please find attached GENERAL risk warning:

Risks Warning Alpari (UK) Risk Warning Disclosure

[U]“It is possible that you can lose all of the money you deposit, and in some circumstances you may even be required to deposit additional sums to cover your losses.”
[/U]
DO YOU HAVE ANY EXPLANATION FOR THAT???

4

it has happened to me with liteforex … my 1st busted account … i had deposit 10 dollars additional to cover my loss…

i dont understand it either … but i was using insane levarage and lot of open positions … :smiley:

6

brokers just use these terms and conditions to cover their backs.

7

I suspect that if you are using very high margin and get a spike or a gap, your margin deposit may not be enough to cover your loss by the time it gets closed.

8

I saw this on my demo with MIG with the 100 pip gap over the weekend. Ended up with a large negative balance, not sure how they would reconcile that if it was live. International debt collector?

9

Hi All,

Please find responds from some Brokers. Only Oanda has confirmed that with them I will not lose more than my deposit.

Below you can find 3 emails from different brokers:

[B]OANDA[/B]
[U]With OANDA, you will never lose more than what you have put into the account [/U]as our platform has a feature called Margin Call. A margin call is the situation when the FXTrade Platform automatically closes all of your open positions and may be necessary to ensure that you cannot lose more than the amount of collateral in your Account. Here’s a link for margin rules such as when a margin call will happen: Help and Support

A margin call happens to ensure that you will never be in a situation of owing us money, in another word having negative balance. If platform problem caused the margin call to fail, you will be refunded for the amount you lost more than you should.

Our platform trading continues 24 hours a day and 7 days a week. Therefore, the price will be continuous and there will be no opening or closing price. When a margin call happens, all your active trades will be closed out, and the remaining balance will stay in your account.

[B]ALPARI:[/B]
Usually a losing position is automatically closed by the system when Equity becomes less than 20% of the Necessary Margin.

However, the FX market is highly volatile and if you have a very low margin level over economic news releases, or under other abnormal conditions, the market can rapidly move against you and the system will close open positions at the next best available price which could cause you to lose the whole deposit or even more. Also, if you are holding positions over a weekend when we are closed, the market can open out of line from the close on Friday causing extended losses.

[B]ActivTrades[/B]
At ActivTrades we have the automatic Trade-out system which closes automatically your positions in case you don’t have enough margin to keep your positions open on your trading account. This systems avoid your account to have a negative balance.

However you must be aware that, in some rare cases, your account could have a negative balance, for example if your account is almost in margin call on Friday and if you keep your positions open during the week end and if there are some gaps at the opening on Monday (because your orders would be closed at the opening price on Monday).

10

Every broker has this kind of risk, EVERY. Forex is high risk business and clients should know that before opening an account. It IS possible to lose more than you have, also with Margin Call.

11

According OANDA you will get money back if it will happen.

12

I would like to see if OANDA would really keep their word when you check your account on monday and find that the market opened a gap during the weekend of over 100 pips against your position. This is “somehow rare” on forex as it can be traded [U]almost[/U] 24/6 but may happen and most brokers if not all have this terms to cover for their own loss. I would see it as normal. Trade safe and wise.

13

Simply tell them to piss off if they ask you to “deposit additional sums to cover your losses.”