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 applying leverage to a trade, there is the potential to lose more than the monies you have deposited in your trading account. This is because leverage amplifies both profits AND losses, depending on the direction of the market movement. In general, higher leverage means higher potential returns if the trade goes in your favor, but it also means higher potential losses if the trade goes against you.

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

Axi clients trading under an SVG license are NOT covered by negative balance protection and are therefore liable for all losses incurred and are required to pay all outstanding amounts.