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What is negative cash balance?
What is negative cash balance?
Updated over a week ago

Negative cash balance is formed when you purchase an instrument in a currency that is not physically available on your account.


You have 10,000 EUR in cash in your account.

You decide to purchase 500 XYZ stocks on the New York Stock Exchange (NYSE), each costing 2 USD. As a result, you will notice a negative position in USD cash equal to - 1,010 USD (commission included). This occurred because you didn't have sufficient USD cash reserves on your account.

Note! Keep in mind that turning off leverage will not protect your account from having a negative cash balance.

What to do with negative cash?

It is your responsibility to choose whether or not to keep negative cash. However, keep in mind that negative cash is charged with interest. The interest rates are found in the Client's Area and are calculated as follows:

Position.Value * (Rate(%)/360) * days = Interest amount

If you leave negative cash on the account, it will influence the Margin Utilisation rate and might lead to a Margin call.

How to avoid negative cash?

There are several ways to avoid negative cash:

  • Enable Autoconversion. This will automatically convert your negative cash into the selected base currency.

  • Convert currencies in advance. Go to the Instruments module, select Cash from the list of instruments, and then buy it with the currency you'd like to exchange

  • Go negative and convert afterwards. In this scenario, the most convenient way to convert your negative cash is to use the desktop version of the platform and the module Summary. Open the module, right-click on the negative position and select the desired currency.

All the methods are described in our tutorial.

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