All brokers should forgive negative balances

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Swiss based forex broker Dukascopy took an exceptional step to clear negative client balances.

Dukascopy joins OANDA which made a already made a similar announcement in the immediate aftermath. Shouldn’t all forex brokers follow?

The recent news

Due to the extreme moves that resulted from the removal of the SNB floor under EUR/CHF, the lack of liquidity resulted in some clients entering negative equity. Dukascopy decided to release these customers from any obligation to cover the negative balance.

Dukascopy also states that it has not canceled or negatively adjusted any trade concluded on January 15th, aka “Black Thursday”.

OANDA said last week: “OANDA did not re-quote or amend any CHF cross client trades. We even took the further step of forgiving all negative client balances that were caused when clients could not close out their positions fast enough”.

There may be other brokers that have followed this path. We will update.

All brokers should waive negative balances

Who is to blame for the extreme market moves? It is easy to point the finger at SNB governor Thomas Jordan, but unfortunately it is unrealistic to claim losses from him nor from his institution.

So, between the big broker and the small client, who can afford the loss? Yes, that was a rhetoric question.

Let’s think in practical terms: the client saw his account wiped out. He already has doubts about returning to trading forex. Let’s say he does want to deposit new funds and return to trading.

Will he first cover the negative balance and then deposit even more money with the broker where he lost the funds? How easily can the broker recover the funds anyway.

Or will he start fresh with a new broker that announced a waiver of a negative balances? 

More: Forex traders should not lose more than they deposit

Here are all the reactions from 63 forex brokers (and counting)

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

12 Comments

  1. It actually makes a lot of sense for brokers to clear negative balances from a regulatory standpoint.

    Clients can make the case with the regulator that they were not properly informed that they could lose more than the amount of money in there account, and depending on the jurisdiction the regulator will tend to find in favor of the client causing the broker a big headache.

    Thus forgiving negative balances, if they can afford it, will help them avoid the impact of any over zealous regulators on their business.

  2. Substitute on

    Now only invest with a broker who will have protection from the negative balance,
    2000+ pips gap can be repeated again and then what?
    Years of teaching technical and fundamental analysis went up in smoke.

  3. Ilyes Negadi on

    These 2 brokers have been pointed out, but other brokers do it all year round not only after such storm.
    I’ve tried HotForex and Exness, both make an automatic deposit on the account to restore it to 0
    I’m even ashamed when i calculate how much exness wins with me from spreads and how much they lose from bonus depleted and negative balances restored! while i’m in profit in total.
    XM also clears negative balances and probably many others do.

  4. @ all effect IG clients (according to reports their must be around 300): kindly send an email to [email protected] . He is coordinating our complains and can add you to our discussion list (so far we are 14) – I just received the following email today:

    Dear XYZ,

    Our records show that you have an outstanding debit balance of £XZY due on your account.

    Please clear this balance in full as soon as possible.

    You can add the necessary funds by logging in to our dealing platform and making a payment through the ‘my account’ section, or by calling us on 020 7633 5304 with your debit or credit card details.

    You can discuss this debit balance with our Credit team by calling us on 020 7633 5304.
    Kind regards

    Credit team

    T 020 7633 5304
    T +44 (0)20 7573 0010
    E [email protected]

  5. Apparently there are now 25+ members of [email protected] and another 20+members for the people using IG in countries outside of Europe.

    280 odd people left to come out of the woodwork….make it happen

  6. Hello FinFX just slapped me with a $4,000 invoice after losing all my money with them, should I pay or let them deal with it since they have no jurisdiction in the USA?