EU retail client protections explained: leverage caps, 50% close-out and negative balance
The Sentinelle Markets team · 29 October 2026 · 5 min read · How we write
In short
- Retail leverage is capped at 30:1 on major pairs and lower elsewhere.
- The 50% close-out is a safety net, not a stop-loss.
- An offer of 500:1 to a retail client in France is a reason to check the firm.
If you open a leveraged account with a firm authorised in the EU as a retail client, a set of protections applies whether you read about them or not. They were introduced by ESMA in 2018 and then made permanent by national regulators such as the AMF in France and the FSMA in Belgium. Knowing them helps you spot a platform that promises things an authorised firm isn't allowed to offer.
The three protections
| Protection | What it does | What it means for you |
|---|---|---|
| Leverage caps | Limit how much exposure each euro of margin can carry | Smaller positions for the same deposit |
| 50% margin close-out | Positions are closed when equity falls to half the required margin | A loss is cut before the account hits zero |
| Negative balance protection | You can't lose more than the money in the account | No debt to the firm after a gap |
The leverage caps, in order
| Underlying | Maximum leverage for retail clients |
|---|---|
| Major currency pairs | 30:1 |
| Other currency pairs, gold, major indices | 20:1 |
| Other commodities, other indices | 10:1 |
| Individual shares | 5:1 |
| Cryptocurrencies | 2:1 |
A platform offering 500:1 to a retail client in France is a reason to stop and check who it really is (how to search the warning lists). Switzerland is not in the EU: FINMA's rules differ, so check them on finma.ch.
The 50% close-out with numbers
Account of $2,000. You open 0.3 lot of EUR/USD at 1.1000, so a notional of about $33,000.
| Value | |
|---|---|
| Required margin at 30:1 | $33,000 ÷ 30 = $1,100 |
| Close-out level (50% of margin) | $550 of equity |
| Loss that triggers it | $2,000 − $550 = $1,450 |
| Pip value at 0.3 lot | about $3 |
| Adverse move before close-out | about 480 pips |
Illustrative calculation, not an expectation of results.
Check the pip value for your own size with the pip value calculator. The close-out is a last safety net, not a stop-loss: losing $1,450 on one trade is far beyond any sensible risk rule. Size from your stop instead, with the lot size calculator.
The risk warning percentage
Authorised firms must display the share of their retail accounts that lose money on these products. Those figures are usually well above half. Read it as what it is: a measured result across the firm's own clients. Most retail traders lose money.
What the protections don't do
- They don't stop slippage: a stop can still fill worse than planned (slippage and gaps).
- They don't apply to "professional client" status, which some platforms push people to request.
- They don't protect you from an unauthorised firm, which follows no rules at all.
We don't recommend any product or firm. These rules are explained so you know what an authorised firm must do, and can recognise one that doesn't.
Questions people also ask
What leverage can a retail client get in France?
Up to 30:1 on major currency pairs, 20:1 on other pairs, gold and major indices, 10:1 on other commodities and indices, 5:1 on shares and 2:1 on crypto.
Can I lose more than my deposit?
Retail clients of EU-authorised firms have negative balance protection, so losses are limited to the money in the account.
Do these rules apply in Switzerland?
Switzerland is not in the EU and FINMA's rules differ. Check them on finma.ch.
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