Can you lose more than whatīs in the account? | Forex Factory

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Can you lose more than whatīs in the account?

  • #1
  • First Post: Dec 26, 2007 5:22pm Dec 26, 2007 5:22pm
I wrote this in the beginners forum also but maybe itīs better here..
Moderators can delete the first post.

Is it possible to lose more than what is in the account? So that you owe them money. For example if the margin system fails, the market stops working if thereīs a big shock etc.

Maybe someone know what the law says and if there is a difference between Forex, futures etc?

I read that when Silver moved fast some accounts went into negative.
  • #2
  • Dec 26, 2007 5:39pm Dec 26, 2007 5:39pm
No. Don't worry about that. You can lose only what you have put on the table, just like in poker
  • #3
  • Dec 26, 2007 5:41pm Dec 26, 2007 5:41pm
About this....if you don't use a margin call as a stoploss, then you'll never have to worry. Study hard so you'll never have to worry about that.
I dream, therefore I become.
  • #4
  • Dec 26, 2007 5:47pm Dec 26, 2007 5:47pm
The firm i have been talking to says thereīs no official policy and it would be treated on a case by case basis.
  • #5
  • Dec 26, 2007 5:51pm Dec 26, 2007 5:51pm
Quoting mike w
About this....if you don't use a margin call as a stoploss, then you'll never have to worry. Study hard so you'll never have to worry about that.

Do you mean guaranteed stops? Iīm not sure but isnīt there usually a - We do not hold responsibility for any failure of this or that
  • #6
  • Dec 26, 2007 5:58pm Dec 26, 2007 5:58pm
Quoting johs
The firm i have been talking to says thereīs no official policy and it would be treated on a case by case basis.


So i guess they have the right to demand the money. The leveraged money is a loan?
  • #7
  • Dec 26, 2007 6:02pm Dec 26, 2007 6:02pm
It depends on the broker and on the client.

For small investors (which I assume by the talk that you're one) any serious broker will close your positions before you go below 0 in your account. For not so serious brokers there has been reports of them letting the loss run and then asking for their money.

When you're a big costumer they usually call you before closing your positions to give you a chance to refill the account.
  • #8
  • Dec 26, 2007 6:11pm Dec 26, 2007 6:11pm
Quoting branco
It depends on the broker and on the client.

For small investors (which I assume by the talk that you're one) any serious broker will close your positions before you go below 0 in your account. For not so serious brokers there has been reports of them letting the loss run and then asking for their money.

When you're a big costumer they usually call you before closing your positions to give you a chance to refill the account.

They want to protect themselves with the margin requirement of course. But with the Silver market i mentioned it moved so fast i assume so that the system did not work. And the accounts had negative balance. If the losses would be big perhaps the loss from bad publicity would be nothing anyway.

Do you know what happened with the not so serious brokers?
  • #9
  • Dec 26, 2007 6:18pm Dec 26, 2007 6:18pm
Quoting johs
Do you know what happened with the not so serious brokers?
Fortunately nothing that happened to me personally so I can't go into much detail even if I wanted to. I would assume you would have to find a way to give them the money.

From what I heard (and this is 2nd hand information) the broker in question was one of those that was "giving away" 100USD for new traders to use. They weren't on the business of being a broker, they were on the business of letting people go broke so they could ask for their money.... worst kind of bucketshop.
  • #10
  • Dec 27, 2007 2:02am Dec 27, 2007 2:02am
Quoting branco
Fortunately nothing that happened to me personally so I can't go into much detail even if I wanted to. I would assume you would have to find a way to give them the money.

From what I heard (and this is 2nd hand information) the broker in question was one of those that was "giving away" 100USD for new traders to use. They weren't on the business of being a broker, they were on the business of letting people go broke so they could ask for their money.... worst kind of bucketshop.

Would be interesting to see if anyone took it to court and what happened.
  • #11
  • Last Post: Dec 27, 2007 3:19am Dec 27, 2007 3:19am
I have the retail broker FX Solutions, and they don't guarantee no negative balance (or stops in extreme situations) but they try not to let it happen.
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