Friedberg direct powered by avatrade apparently has a negative balance protection. It says on the margin call & margin warning system document under “ Is there a debit balance risk?” section.
But in the section 14.9 in terms & conditions, it was stated that “ Customer shall at all times be liable for the payment of any deficit balance of Customer upon demand by Friedberg Direct and in all cases, Customer shall be liable for any deficiency remaining in Customer’s account(s) in the event of the liquidation thereof in whole or in part by Friedberg Direct or by Customer.”
Does this mean that they have the legal rights to take my money for the negative balance that I get when using leverages?
I asked the customer support and they keep saying they have negative balance protection and won’t answer my question.
The T&C’s for the company I trade through has a provision that says that they provide negative balance protection arising from normal trading activity as a retail client. However, they also say that it is possible under certain circumstances that the account could go negative through means other than normal trading activities - they (understandably?) don’t want to specify what these are. I can just suppose (and hope) that normal trading is protected as they say, but other activities the client might carry out are not.
It seems the protection applies unless I deliberately do something which is not normal trading. I have no idea what they think a client might do so I’m not sure if this helps.
If your broker offers you negative balance protection, you can be sure that your balance will never go negative. If it does, your broker will pay for it. This is a big reason for me why I have chosen my brokers offering segregation of funds and negative balance protection.