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Negative Balance Protection

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Description

A regulatory measure ensuring that a trader’s account balance cannot go below zero, even in volatile markets.

Negative Balance Protection is a regulatory safeguard designed to ensure that a trader’s account balance does not fall below zero, protecting them from owing money to their broker in volatile market conditions. This feature is particularly important in leveraged trading scenarios like forex or CFDs, where rapid price movements can lead to significant losses. It promotes safer trading by providing a financial backstop, encouraging participation in markets without the fear of devastating financial losses.

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