Negative Balance Protection - Forex Glossary | ForexCracked
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Regulation & Safety Beginner

Negative Balance Protection

Also called: NBP

A broker policy that prevents your account from going below zero — losses can't exceed deposits.

01

Definition

Without NBP, a sudden gap (e.g. the 2015 CHF flash crash) can put your account thousands of dollars negative — a debt the broker can technically demand.

NBP is mandatory for retail clients under ESMA (EU), FCA (UK), and ASIC (AU). Offshore and US brokers don’t always offer it.

02

Example

Swiss National Bank removes EUR/CHF floor (15 Jan 2015). Pair crashes 30% in minutes. Brokers without NBP send clients negative-balance bills; brokers with NBP absorb the loss.