Over-the-counter derivatives are leveraged products that carry a high level of risk to your capital. Derivate instruments such as Forex and CFDs can be highly volatile due to the market conditions of the underlying instrument and the amount of leverage available.

When you apply leverage to a trade, the potential exists to lose more than the monies you have deposited in your trading account as it amplifies the profits and/or losses, depending on the market movement. In general, the greater the leverage the higher the potential returns but the higher the potential losses may be.

Examples of scenarios that could result in a negative account balance include slippage, overnight financing charges, and Index CFD dividend adjustment.

• Slippage: In certain market conditions there can be a difference between the price you expect to pay for a trade and the actual price you pay at the point the trade is executed. This is known as slippage and it can result in a negative balance. Please refer to our ‘Slippage’ section for more information.
• Overnight financing charges: If you are holding a short position overnight, swap charges will apply and these have the potential to create a negative account balance.
• Index CFD dividend adjustment: Index CFDs are made up of a group of shares that may pay dividends throughout the year. Short positions will be positively impacted by the drop in Index price, so you will be debited the dividend adjustment value.

Negative balance protection

Clients who are classified as Retail Clients under FCA (Financial Conduct Authority) regulation are given the added protection of Negative Balance Protection.

For the avoidance of doubt, clients may have one Trading Account with Axi but may have multiple sub-accounts in the form of Trading Platform logins. Therefore, the aggregate sum of monies held on all platforms will be taken into consideration and may be used to offset a negative balance.

If your account becomes negative, please reach out to our Client Services team.

Professional client accounts are not afforded negative balance protection.