Common use of NEGATIVE BALANCE PROTECTION Clause in Contracts

NEGATIVE BALANCE PROTECTION. CFDs are leveraged products and therefore incur a high level of risk and may result in the loss of all the client’s invested capital. For the benefit of the Company’s clients, the Company has implemented a “negative balance” protection program, on an account basis, whereby the client cannot lose more than his invested capital. Nonetheless, the client is expected to actively monitor and manage open positions in the account and to contact the Company about options if the account is close to a margin call. The client agrees not to abuse the “negative balance” protection policy and acknowledges that the Company reserves the right, at its sole discretion, to immediately terminate the client's access to the trading account and to recover any losses caused by the client in the case of abuse. The Company may consider the following, whether intentional or unintentional, to be attempts to abuse the policy, by way of, but not limited to (i) requesting a cash withdrawal from the account which causes the margin level to drop to 50% or lower, (ii) hedging exposure using multiple trading accounts, whether in the client's name or in connection with another client, (iii) using arbitrage to intentionally take advantage in gaps or delays in the data feed in such a way that it creates an exceptionally large exposure for the Company and/or (iv) by failing to take reasonable and responsible action to manage open positions in order to reduce the risk of loss.