URICH2.com

You can earn cashback on every trade

no increased commission or spread, just the original trading cost offered by brokers

Get the best commission rebate rate with us


Brokers News

         Fundamental Concepts             Advanced Concepts             Strategy & Education             Personalise Manual
TICKMILL: Do you offer negative balance protection/cover negative balance?
Source:https://www.tickmill.com/about/faq/category/trading-conditions | Author:finance-102 | Date2023-04-21 | 258 Views | Share:
Traders who use the maximum leverage available face the risk of a negative balance.



For example: Let’s assume that you have 200 USD on your account and you open 1 lot on USDJPY on Friday evening, with 1:500 leverage and 200 USD margin.*

Traders who use the maximum leverage available face the risk of a negative balance.


For example: Let’s assume that you have 200 USD on your account and you open 1 lot on USDJPY on Friday evening, with 1:500 leverage and 200 USD margin.*


On Sunday night, the market opens 30 pips away from Friday’s closing price in a direction against you, so your position will immediately have a loss of 30 pips x 10 USD = 300 USD loss, while you have only 200 USD on your account.


The position will be automatically closed and your account would have a negative balance of -100 USD. This situation is 100% impossible when a trader uses 1:1 leverage. The higher leverage a trader uses, the more risks they take. Please also note that a negative balance may occur due to a slippage during high volatility.


Tickmill grants negative balance protection to all clients. The company may chose not to grant negative balance protection if the negative balance has been incurred as a result of fraudulent purposes or market abuse.


Moreover, our Risk department is constantly monitoring our clients’ risk-taking and if we see that a client trades irresponsibly, then we will notify the client via e-mail and ask them to reduce risk exposure. Also, we might reduce the leverage on the client’s account.


*This is an illustrative example.


FXPRO NEWS

Cash Back Commission

AXITRADER NEWS

Cash Back Commission

TICKMILL NEWS

Cash Back Commission


Trading Knowledge