what happens when you have open trades but your account is on a negative?
Look hard at the firm you’re dealing with. Its possible the firm doesn’t mind your account going negative because they haven’t been placing your trades in the market anyway. Plus maybe they were never going to either re-fund your surviving capital or pay you any profits when you asked for them.
1 Like
Is that possible?
I think when our balance negative we got margin calls
It is possible.
If you leave an order overnight and the opens way past your SL - you can get a loss that is way higher than the SL level you’ve set.
Also, if you have hedged possitions and one gets closed out due to a margin call and the other is no longer hedged this can turn your account to become negative.
For cases like this it’s good to work with a regulated broker or at least one that has negative balance protection.
Ever since the new ESMA regulations came into effect all EU regulated brokers must provide said protection to their retail clients. So, yeah. At least that is a possitive of the ESMA regulations…
2 Likes
exactly , agree with you .
I’m not sure there’s a broker that offers less than 10% call out margin. If a broker allows your open orders run, while your equity is @ negative, run away from such broker. They’d never pay you when you have profits to withdraw.
I agree with the others. This situation is possible to happen in some sharp market conditions, stopped out positions, orders left for a few days with a sudden change in the price, etc. In this case, it is better to have a broker with negative balance protection as otherwise the broker will make you pay the difference. Read the Terms and Conditions carefully as this should be described in details or ask your broker to clarify the case.
1 Like
Hi Everyone,
It’s important to note that under normal market conditions, most brokers have monitoring systems in place that will automatically close your trade once your account falls below the minimum margin requirement. This is to reduce the chances that your account balance goes negative.
That said, you do risk incurring losses greater than your account balance, especially during periods of extreme market volatility. You might find this earlier discussion helpful to understand how this could happen: Can I lose more than my deposit?
Such a bad experience, but I faced this issue in my earlier stage of trading, no way for current trading situations.