No, you can’t lose more than your initial investment when trading with leverage on eToro. Thanks to eToro’s built-in negative balance protection, your account can’t dip below zero even if the market suddenly nosedives or volatility kicks off. Your maximum loss is capped at the amount you’ve funded your account with.
That said, don’t mistake “capped losses” for “safe.” Leverage can amplify gains, sure but it also magnifies losses. Let’s say you put down $1,000 and apply 10x leverage. That gives you exposure to a $10,000 trade. If the market moves just 10% against you? Your entire $1,000 is gone. Fast.
To keep your account from spiraling, eToro has stop-out mechanisms. If your equity slips under the required maintenance margin, trading positions may be closed automatically. And while stop-loss orders can help limit your downside, in highly volatile conditions, they might not trigger exactly where you expect.
So yes, eToro stops you from losing more than your original investment, but don’t get complacent. Leverage is risky. Understand what it does, how fast things can move, and (my top recommendation) use a risk management every time you trade.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which hasbeen prepared by our partner utilizing publicly available non-entity specific information about eToro.
About Mike Druttman
