Does Pepperstone offer negative balance protection?
The Pepperstone MT4/5 and cTrader platforms have a built-in automatic stop-out system which closes trades when your equity falls below a predetermined level. However, this does not guarantee the balance will not go into negative or that you will be left with a specific amount of money in your account when the trades are closed out. Trade execution depends on market liquidity and pricing.
The MT4 and MT5 platforms will automatically close out trades in order of highest running loss when your margin level (equity/margin requirements) falls to 50% or less. In a fast moving market, all trades may need to be closed immediately in order to prevent you from incurring significant losses, and your equity may already have fallen below 0 when the orders are triggered to close out your trades.
The cTrader platform uses a 'Smart' stop out system to close out part of your orders (still in order of highest running loss) rather than the whole trade when your margin level falls to or below 50%. This system tries to close out only part of your orders so that part of the original order can remain open so as to take advantage of any positive movements in price which might occur after the first partial close out. Just like the MT4/5 platform, in a fast moving market all trades may need to be closed immediately in order to prevent you from incurring significant losses, and your equity may already have fallen below 0 when the orders are triggered to close out your trades.
If your account does fall into a negative balance, we will return the balance to zero as soon as possible for our retail clients. Please note, guaranteed negative balance protection does not apply to you if you are classified as a Pepperstone Pro or as a Professional client.
You can find more information about margin call and stop out here.