What is the negative balance protection feature?
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Negative balance protection is a safeguard implemented by professional brokers to prevent traders from losing more than their account balance. In essence, it ensures that you can never lose more money than you have deposited into your trading account.
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For example, if a trader invests $1,000 using high leverage and the trade incurs a loss due to market fluctuations, the trader would typically lose their initial capital plus any additional losses. Without negative balance protection, the trader would have to cover any deficit beyond their capital, such as an additional $40 loss. However, with negative balance protection, losses are limited to the account balance, and the trader will not be required to pay beyond what they originally invested.
Don't lose using Negative Balance Protection
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In volatile market conditions, particularly during major economic events, sudden fluctuations can significantly impact asset values. This can result in your account balance becoming negative due to sharp price movements. MultiLP safeguards your investments with negative balance protection, ensuring that your account balance is restored to zero, thus preventing losses beyond your initial equity.
