Negative Balance Protection (NBP)

Negative Balance Protection – A broker policy (often mandated by regulators for retail accounts) that guarantees you cannot lose more money than you deposit in your account. If extreme market movements cause your account to go below $0 (negative equity), NBP ensures the balance is adjusted back to zero, so you don’t owe money to the broker. For example, if a flash crash or weekend gap causes your EA’s trades to blow past the stop out level and the account hits -$500, the broker with NBP will forgive that -$500 and reset your balance to $0 (some may do this automatically, others on request). This protection is important for high-leverage strategies or those holding positions during volatile events – it prevents a worst-case scenario where you end up in debt due to trading losses. Europe’s ESMA regulations require NBP for retail clients, and many reputable brokers worldwide offer it as a safety net. From a robot perspective, you ideally never want to rely on NBP (good risk management should close positions long before an account wipeout), but it’s nice to know it’s there as a final backstop.

⬅ Robots Glossary