Negative balance protection

The rule that stops a retail account owing the broker money after a violent market gap.

Retail clients of UK firms cannot lose more than the funds in their trading account. That single sentence does more work than any amount of marketing language about "regulated and trusted", a phrase which appears on the websites of firms with no UK permissions at all.

The rest of this page is written for the moment it matters: when you are about to deposit, when something has gone wrong, or when a broker's answer does not sound right. Each point below is a rule you can check for yourself against public sources.

Before the rule, a sudden repricing could leave leveraged retail accounts owing far more than they had deposited. The protection puts that tail risk back on the broker where it belongs.

In practice this is where the difference between firms shows up. Two brokers can both be authorised and still handle the same situation very differently, because the rule sets a floor rather than a standard. When we score a firm on regulation and safety, we look at how far above that floor it chooses to operate: how clearly it names its entity, how specific its disclosure is, and how it behaves when a client disputes something.

Protection is calculated on the account as a whole, not on individual positions, so a profitable trade can still be netted against a catastrophic one.

In practice this is where the difference between firms shows up. Two brokers can both be authorised and still handle the same situation very differently, because the rule sets a floor rather than a standard. When we score a firm on regulation and safety, we look at how far above that floor it chooses to operate: how clearly it names its entity, how specific its disclosure is, and how it behaves when a client disputes something.

Elective professional clients give this up along with the retail leverage caps. That trade is rarely worth it for anyone trading their own money.

In practice this is where the difference between firms shows up. Two brokers can both be authorised and still handle the same situation very differently, because the rule sets a floor rather than a standard. When we score a firm on regulation and safety, we look at how far above that floor it chooses to operate: how clearly it names its entity, how specific its disclosure is, and how it behaves when a client disputes something.

The protection caps the worst case at your balance. Losing everything in the account is still a disaster, so sizing and stops remain the real defence.

In practice this is where the difference between firms shows up. Two brokers can both be authorised and still handle the same situation very differently, because the rule sets a floor rather than a standard. When we score a firm on regulation and safety, we look at how far above that floor it chooses to operate: how clearly it names its entity, how specific its disclosure is, and how it behaves when a client disputes something.