Slippage and Negative Balance Scenarios
Examples of scenarios that could result in negative account balance include:
Negative slippage
Whenever an order is placed between one of these parties there is a time delay (even if only for a fraction of a millisecond). If prices change during that time delay then there could be SLIPPAGE.
When slippage occurs you don’t get the price you were quoted, instead, you get the next best price that is available.
When you place a large order you could be slipped because there are not enough buyers or sellers to take your trade.
Slippage occurs when
- There is volatility – Such as news events
- Fast moving markets – Such as during a breakout
- Illiquid markets – such as public holidays
- Over the weekend
Axi does not offer a guarantee on stop losses. It is possible to receive negative slippage which can result in you losing more than the balance of your account.
For more information on slippage, please check here.
Overnight financing charges
If you are holding a short position overnight, swap charges will apply, which can potentially create a negative result.
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.
You can find out more information about Negative Balance here.