{"id":2563,"date":"2026-05-15T03:53:50","date_gmt":"2026-05-15T03:53:50","guid":{"rendered":"https:\/\/xemsignup.com\/?p=2563"},"modified":"2026-05-15T03:58:29","modified_gmt":"2026-05-15T03:58:29","slug":"xm-negative-balance-protection","status":"publish","type":"post","link":"https:\/\/xemsignup.com\/fa_af\/xm-negative-balance-protection\/","title":{"rendered":"XM Negative Balance Protection \u2014 How the Zero-Reset Works, When It Applies, and Its Limits"},"content":{"rendered":"\t\t
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\n\t\t\t\t\t\r\n\r\n\r\n\r\n\r\nXM Negative Balance Protection \u2014 How It Works, Limits, and When It Does Not Apply | xemsignup.com<\/title>\r\n<meta name=\"description\" content=\"Complete guide to XM's negative balance protection: how the zero-balance reset works, the role of margin call and stop-out, which situations void the protection, and why it matters for high-leverage trading.\">\r\n<meta name=\"robots\" content=\"index, follow\">\r\n<link rel=\"canonical\" href=\"https:\/\/xemsignup.com\/xm-negative-balance-protection\">\r\n<meta property=\"og:title\" content=\"XM Negative Balance Protection \u2014 How It Works and When It Applies\">\r\n<meta property=\"og:description\" content=\"XM resets any negative account balance to zero automatically. Learn how the system works, the margin call and stop-out mechanism, and the specific situations where protection does not apply.\">\r\n<meta property=\"og:url\" content=\"https:\/\/xemsignup.com\/xm-negative-balance-protection\">\r\n<meta property=\"og:type\" content=\"article\">\r\n<link rel=\"preconnect\" href=\"https:\/\/fonts.googleapis.com\">\r\n<link href=\"https:\/\/fonts.googleapis.com\/css2?family=Inter:wght@400;500;600;700;800&display=swap\" rel=\"stylesheet\">\r\n\r\n<script type=\"application\/ld+json\">\r\n{\r\n \"@context\": \"https:\/\/schema.org\",\r\n \"@type\": \"FAQPage\",\r\n \"mainEntity\": [\r\n {\r\n \"@type\": \"Question\",\r\n \"name\": \"What is XM's negative balance protection and how does it work?\",\r\n \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"XM's negative balance protection automatically resets any account balance that goes below zero back to zero. If extreme market volatility causes losses that exceed the funds in your account \u2014 meaning your stop-out was triggered but the market moved so fast that positions were closed at prices worse than expected \u2014 XM absorbs the deficit. You will never owe XM money and will never be asked to cover a loss greater than your deposited balance.\" }\r\n },\r\n {\r\n \"@type\": \"Question\",\r\n \"name\": \"Does XM negative balance protection apply to all account types?\",\r\n \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"Yes. XM provides negative balance protection across all retail account types \u2014 Standard, Micro, Ultra Low Standard, Ultra Low Micro, and Shares \u2014 and across all four regulated entities (FSC Belize, CySEC Cyprus, ASIC Australia, DFSA Dubai). The protection is applied on a per-account basis, meaning each account is treated individually.\" }\r\n },\r\n {\r\n \"@type\": \"Question\",\r\n \"name\": \"What is the margin call level and stop-out level at XM?\",\r\n \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"XM issues a margin call when your margin level falls to 50% \u2014 this is a warning that your account requires attention. If the margin level continues falling to 20%, XM's system automatically begins closing open positions starting with the least profitable one first (stop-out). Negative balance protection activates if positions are closed at prices that result in a balance below zero after the stop-out process.\" }\r\n },\r\n {\r\n \"@type\": \"Question\",\r\n \"name\": \"Can I lose more money than I deposited when trading with XM?\",\r\n \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"No. XM's negative balance protection ensures your maximum possible loss is limited to the funds in your trading account. If market conditions cause losses beyond your account balance, XM covers the shortfall. Your account is reset to zero rather than going into debt. This applies under normal trading conditions across all XM entities.\" }\r\n },\r\n {\r\n \"@type\": \"Question\",\r\n \"name\": \"When does XM negative balance protection NOT apply?\",\r\n \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"XM's negative balance protection does not apply in cases of deliberate abuse of the system. Specifically: cross trading between two accounts held in different names (either at XM or between XM and another broker) to generate artificial losses; arbitrage strategies that exploit price differences between systems; and fraudulent procurement of XM Points or bonuses. If XM identifies any of these patterns, negative balance protection may be voided for losses above the deposited amount.\" }\r\n },\r\n {\r\n \"@type\": \"Question\",\r\n \"name\": \"Does negative balance protection mean I cannot lose my entire deposit?\",\r\n \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"No. Negative balance protection prevents your account from going below zero \u2014 it does not prevent you from losing all of your deposited funds. You can still lose your entire deposit through normal trading losses. The protection only activates in situations where market conditions would otherwise push your balance into negative territory, meaning you would owe money to the broker. The floor is zero, not your original deposit amount.\" }\r\n },\r\n {\r\n \"@type\": \"Question\",\r\n \"name\": \"How quickly does XM reset a negative balance to zero?\",\r\n \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"XM's negative balance protection activates immediately after positions are closed and the balance goes negative. The reset to zero is automatic \u2014 you do not need to contact XM support or submit a request. The correction also applies immediately after any additional deposit, exchange of XM Points to cash, or fund transfer from another account with a positive balance into the negative account.\" }\r\n }\r\n ]\r\n}\r\n<\/script>\r\n\r\n<script type=\"application\/ld+json\">\r\n{\r\n \"@context\": \"https:\/\/schema.org\",\r\n \"@type\": \"Article\",\r\n \"headline\": \"XM Negative Balance Protection \u2014 How It Works, Limits, and When It Does Not Apply\",\r\n \"description\": \"Detailed guide to XM's negative balance protection covering the automatic zero-reset mechanism, margin call and stop-out levels, per-account basis application, situations where protection is voided, and the difference between protection and deposit loss prevention.\",\r\n \"url\": \"https:\/\/xemsignup.com\/xm-negative-balance-protection\",\r\n \"publisher\": { \"@type\": \"Organization\", \"name\": \"xemsignup.com\", \"url\": \"https:\/\/xemsignup.com\" },\r\n \"about\": { \"@type\": \"Thing\", \"name\": \"XM negative balance protection\" },\r\n \"mentions\": { \"@type\": \"Organization\", \"name\": \"XM Global Limited\", \"url\": \"https:\/\/www.xm.com\" }\r\n}\r\n<\/script>\r\n\r\n<style>\r\n*,*::before,*::after{box-sizing:border-box;margin:0;padding:0;}\r\n:root{\r\n --red:#E31837;--red-dark:#B5121E;--red-bg:rgba(227,24,55,0.06);--red-border:rgba(227,24,55,0.2);\r\n --black:#111111;--dark:#222222;--mid:#555555;--muted:#888888;\r\n --lighter:#FAFAFA;--border:#E5E5E5;--white:#FFFFFF;\r\n --radius:8px;--radius-lg:14px;--font:'Inter',-apple-system,sans-serif;\r\n}\r\nhtml{scroll-behavior:smooth;}\r\nbody{font-family:var(--font);background:var(--white);color:var(--black);line-height:1.65;font-size:16px;overflow-x:hidden;}\r\na{text-decoration:none;color:inherit;}\r\n.container{max-width:860px;margin:0 auto;padding:0 20px;}\r\n.container-wide{max-width:1040px;margin:0 auto;padding:0 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1rem;font-size:0.85rem;color:var(--mid);line-height:1.72;border-top:1px solid var(--border);padding-top:0.85rem;}\r\n.faq-item.open .faq-a{display:block;}\r\n\r\n\/* RELATED *\/\r\n.related-grid{display:grid;grid-template-columns:repeat(auto-fit,minmax(200px,1fr));gap:10px;margin-top:1.25rem;}\r\n.related-card{background:var(--white);border:1px solid var(--border);border-radius:var(--radius);padding:1rem 1.1rem;transition:border-color 0.2s;display:block;}\r\n.related-card:hover{border-color:var(--red);}\r\n.rl{font-size:0.68rem;font-weight:700;text-transform:uppercase;letter-spacing:1px;color:var(--red);margin-bottom:5px;}\r\n.rt{font-size:0.85rem;font-weight:600;color:var(--black);line-height:1.35;}\r\n.ra{font-size:0.75rem;color:var(--muted);margin-top:4px;}\r\n\r\nfooter{background:var(--lighter);border-top:1px solid var(--border);padding:2rem 0 1.5rem;}\r\n.footer-inner{display:flex;justify-content:space-between;align-items:flex-start;gap:1.5rem;flex-wrap:wrap;}\r\n.footer-brand{font-size:0.875rem;font-weight:800;color:var(--black);margin-bottom:0.4rem;}\r\n.footer-note{font-size:0.75rem;color:var(--muted);max-width:340px;line-height:1.6;}\r\n.footer-links{display:flex;gap:1.25rem;flex-wrap:wrap;align-items:center;}\r\n.footer-links a{font-size:0.78rem;color:var(--muted);transition:color 0.2s;}\r\n.footer-links a:hover{color:var(--black);}\r\n.risk-strip{background:var(--white);border-top:1px solid var(--border);padding:1rem 0;margin-top:1.25rem;font-size:0.72rem;color:var(--muted);line-height:1.7;}\r\n\r\n@media(max-width:640px){\r\n .hero-stats{grid-template-columns:1fr 1fr;}\r\n .scenario-grid{grid-template-columns:1fr;}\r\n .eeat-box{flex-direction:column;gap:0.75rem;}\r\n .footer-inner{flex-direction:column;gap:1rem;}\r\n .related-grid{grid-template-columns:1fr 1fr;}\r\n}\r\n@media(max-width:400px){.related-grid{grid-template-columns:1fr;}}\r\n<\/style>\r\n<\/head>\r\n<body>\r\n\r\n<header class=\"page-hero\">\r\n <div class=\"container\">\r\n <nav class=\"breadcrumb\" aria-label=\"Breadcrumb\">\r\n <a href=\"https:\/\/xemsignup.com\/\">Home<\/a>\r\n <span class=\"breadcrumb-sep\">\u203a<\/span>\r\n <a href=\"https:\/\/xemsignup.com\/xm-advantages\">XM Advantages<\/a>\r\n <span class=\"breadcrumb-sep\">\u203a<\/span>\r\n <span>Negative Balance Protection<\/span>\r\n <\/nav>\r\n <p class=\"page-eyebrow\">XM Advantages \u2014 Safety<\/p>\r\n <h1>XM <span>Negative Balance Protection<\/span> \u2014 How the Zero-Reset Works, When It Applies, and Its Limits<\/h1>\r\n <p class=\"hero-lead\">XM's negative balance protection automatically resets any account balance that goes below zero back to zero. If a market moves so fast that stop-out cannot prevent losses exceeding your deposited funds, XM absorbs the difference. You will never owe XM money. This guide explains exactly how the mechanism works step by step, the specific situations where it does not apply, and the important distinction between protection from debt and protection from losing your deposit.<\/p>\r\n\r\n <div class=\"hero-stats\">\r\n <div class=\"hs-cell\"><div class=\"hs-num\">$0<\/div><div class=\"hs-label\">Maximum debt to XM<\/div><\/div>\r\n <div class=\"hs-cell\"><div class=\"hs-num\">All<\/div><div class=\"hs-label\">Account types covered<\/div><\/div>\r\n <div class=\"hs-cell\"><div class=\"hs-num\">Auto<\/div><div class=\"hs-label\">Reset \u2014 no action needed<\/div><\/div>\r\n <\/div>\r\n\r\n <div class=\"hero-cta\">\r\n <a href=\"https:\/\/clicks.pipaffiliates.com\/c?c=376664&l=en&p=1\" class=\"btn-red\" target=\"_blank\" rel=\"noopener\">\r\n <svg width=\"15\" height=\"15\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"2.5\"><path d=\"M5 12h14M12 5l7 7-7 7\"\/><\/svg>\r\n Open Protected XM Account\r\n <\/a>\r\n <a href=\"https:\/\/xemsignup.com\/xm-advantages\" class=\"btn-outline\">All XM Advantages \u2192<\/a>\r\n <\/div>\r\n <\/div>\r\n<\/header>\r\n\r\n<main class=\"article-body\">\r\n <div class=\"container\">\r\n\r\n <div class=\"eeat-box\">\r\n <div class=\"eeat-icon\"><svg viewBox=\"0 0 24 24\"><path d=\"M12 22s8-4 8-10V5l-8-3-8 3v7c0 6 8 10 8 10z\"\/><\/svg><\/div>\r\n <div class=\"eeat-content\">\r\n <p><strong>About this guide:<\/strong> xemsignup.com is an independent affiliate website. Negative balance protection information is sourced from XM Global's official Open Execution Policy documentation and verified against XM's published terms and conditions. All accounts are managed by XM Group regulated entities: XM Global Limited (FSC Belize, 000261\/397), Trading Point of Financial Instruments Ltd (CySEC Cyprus, 120\/10), Trading Point of Financial Instruments Pty Ltd (ASIC Australia, AFSL 443670), and Trading Point MENA Limited (DFSA Dubai, F003484).<\/p>\r\n <\/div>\r\n <\/div>\r\n\r\n <div class=\"toc-box\">\r\n <div class=\"toc-title\">On this page<\/div>\r\n <ol class=\"toc-list\">\r\n <li><a href=\"#why-needed\"><span class=\"toc-num\">1<\/span> Why negative balances happen in leveraged trading<\/a><\/li>\r\n <li><a href=\"#how-it-works\"><span class=\"toc-num\">2<\/span> How XM's negative balance protection works \u2014 step by step<\/a><\/li>\r\n <li><a href=\"#margin-stopout\"><span class=\"toc-num\">3<\/span> Margin call and stop-out \u2014 the safety layers before protection activates<\/a><\/li>\r\n <li><a href=\"#scenarios\"><span class=\"toc-num\">4<\/span> Worked examples \u2014 with and without negative balance protection<\/a><\/li>\r\n <li><a href=\"#which-accounts\"><span class=\"toc-num\">5<\/span> Which XM accounts and entities does it apply to?<\/a><\/li>\r\n <li><a href=\"#when-void\"><span class=\"toc-num\">6<\/span> When negative balance protection does NOT apply<\/a><\/li>\r\n <li><a href=\"#limits\"><span class=\"toc-num\">7<\/span> The critical distinction \u2014 protection from debt vs protection from loss<\/a><\/li>\r\n <li><a href=\"#faq\"><span class=\"toc-num\">8<\/span> Frequently asked questions<\/a><\/li>\r\n <\/ol>\r\n <\/div>\r\n\r\n <!-- SECTION 1 -->\r\n <h2 id=\"why-needed\">Why Negative Account Balances Happen in Leveraged Forex Trading<\/h2>\r\n <p>Under normal market conditions, a broker's stop-out mechanism prevents losses from exceeding account funds. When your margin level falls to the stop-out threshold, the system closes your least profitable position automatically. In most cases, this process works as intended and your balance stays above zero even after a significant drawdown.<\/p>\r\n <p>The problem occurs during extreme market events \u2014 flash crashes, central bank interventions, major geopolitical announcements, or gap opens after weekends \u2014 when prices move so rapidly that the stop-out mechanism cannot close positions before the market has already moved far past the intended close price. In these situations, the gap between the intended close and the actual close price can be large enough to push the account balance below zero.<\/p>\r\n\r\n <h3>Real-world events that have caused negative balances at brokers globally<\/h3>\r\n <ul>\r\n <li><strong>Swiss Franc event (January 2015)<\/strong> \u2014 The Swiss National Bank removed the EUR\/CHF cap without warning, causing prices to gap by more than 2,000 pips in seconds. Many traders who were short CHF had losses that wiped their accounts and created debts to their brokers exceeding their deposits by multiples.<\/li>\r\n <li><strong>Cryptocurrency flash crashes<\/strong> \u2014 Crypto CFDs can experience extreme intraday gaps, particularly on lower-liquidity instruments, that bypass normal stop-out processing.<\/li>\r\n <li><strong>Sunday gap opens<\/strong> \u2014 A position held over a weekend can open on Sunday at a price dramatically different from Friday's close if a major news event occurred during market closure.<\/li>\r\n <\/ul>\r\n\r\n <p>Without negative balance protection, a trader in any of these situations would owe their broker the difference \u2014 potentially thousands of dollars \u2014 regardless of how much they originally deposited. XM's policy prevents this outcome entirely.<\/p>\r\n\r\n <hr class=\"divider\">\r\n\r\n <!-- SECTION 2 -->\r\n <h2 id=\"how-it-works\">How XM's Negative Balance Protection Works \u2014 Step by Step<\/h2>\r\n <p>XM's negative balance protection is described in its Open Execution Policy document in direct terms: <em>\"In case the client balance goes negative after all positions close, the Company will cover the negative balance and will not request from clients to cover the required amount.\"<\/em> The mechanism is automatic \u2014 no claim process, no support ticket, no waiting period.<\/p>\r\n\r\n <div class=\"flow-diagram\">\r\n <div class=\"flow-head\">How XM's negative balance protection activates<\/div>\r\n <div class=\"flow-steps\">\r\n <div class=\"flow-step\">\r\n <div class=\"flow-step-num\">1<\/div>\r\n <div class=\"flow-step-content\">\r\n <div class=\"flow-step-tag tag-warn\">Warning stage<\/div>\r\n <h4>Margin level falls to 50% \u2014 margin call issued<\/h4>\r\n <p>XM monitors margin level in real time. When it drops to 50%, a margin call notification is triggered. This is a warning \u2014 no positions are closed at this point. The trader can respond by depositing additional funds or closing positions manually.<\/p>\r\n <\/div>\r\n <\/div>\r\n <div class=\"flow-step\">\r\n <div class=\"flow-step-num\">2<\/div>\r\n <div class=\"flow-step-content\">\r\n <div class=\"flow-step-tag tag-red\">Stop-out stage<\/div>\r\n <h4>Margin level falls to 20% \u2014 automatic stop-out begins<\/h4>\r\n <p>If the margin level continues falling to 20%, XM's system automatically starts closing positions \u2014 beginning with the least profitable open trade. This continues until the margin level recovers above 20% or all positions are closed.<\/p>\r\n <\/div>\r\n <\/div>\r\n <div class=\"flow-step\">\r\n <div class=\"flow-step-num\">3<\/div>\r\n <div class=\"flow-step-content\">\r\n <div class=\"flow-step-tag tag-red\">Gap event<\/div>\r\n <h4>Market gaps past stop-out price \u2014 balance goes negative<\/h4>\r\n <p>In extreme conditions, the market price at which the position can actually be closed is significantly worse than the intended stop-out price. The position closes at the available market price, which may result in losses exceeding the account balance \u2014 pushing the balance below zero.<\/p>\r\n <\/div>\r\n <\/div>\r\n <div class=\"flow-step\">\r\n <div class=\"flow-step-num\">4<\/div>\r\n <div class=\"flow-step-content\">\r\n <div class=\"flow-step-tag tag-green\">Protection activates<\/div>\r\n <h4>XM absorbs the deficit \u2014 balance reset to zero automatically<\/h4>\r\n <p>XM covers the negative amount and resets the account balance to zero immediately. No action is required from the trader. The account can continue to be used after a new deposit is made. The trader does not owe XM anything.<\/p>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n\r\n <div class=\"info-box\">\r\n <strong>Per-account basis:<\/strong> XM's negative balance protection applies on a per-account basis. If you hold multiple accounts and one goes negative while another has a positive balance, XM does not net the accounts against each other \u2014 each account is assessed independently. The negative account is reset to zero regardless of other account balances.\r\n <\/div>\r\n\r\n <hr class=\"divider\">\r\n\r\n <!-- SECTION 3 -->\r\n <h2 id=\"margin-stopout\">Margin Call at 50% and Stop-Out at 20% \u2014 The Two Safety Layers Before Protection Activates<\/h2>\r\n <p>Negative balance protection is the last line of defence. Two earlier mechanisms are designed to prevent the situation from reaching the point where protection is needed. Understanding both helps traders manage their accounts before a crisis rather than relying on the protection to clean up after one.<\/p>\r\n\r\n <h3>Margin call \u2014 50% margin level warning<\/h3>\r\n <p>Your margin level is calculated as: <strong>Equity \u00f7 Required Margin \u00d7 100<\/strong>. When this ratio falls to 50%, XM issues a margin call. At this point, your floating losses have consumed half of your required margin. The margin call is a warning, not an action \u2014 XM does not close any positions. You have the opportunity to add funds, close some positions yourself, or let the situation develop further.<\/p>\r\n\r\n <h3>Stop-out \u2014 20% margin level forced closure<\/h3>\r\n <p>If the margin level continues falling to 20%, XM's system begins closing positions automatically, starting with the trade that has the largest floating loss. This process continues until the margin level recovers above 20% or all positions are fully closed. In fast-moving markets, the actual close price may be worse than the price at which the stop-out was triggered \u2014 this is the gap that can push a balance below zero.<\/p>\r\n\r\n <div class=\"warn-box\">\r\n <strong>Do not wait for margin call to act.<\/strong> By the time your margin level reaches 50%, you have already lost a significant portion of your equity. Waiting until stop-out at 20% gives you even less room. The most effective risk management is monitoring margin level continuously and reducing position size or adding funds before the margin call threshold is reached.\r\n <\/div>\r\n\r\n <hr class=\"divider\">\r\n\r\n <!-- SECTION 4 -->\r\n <h2 id=\"scenarios\">Worked Examples \u2014 How Negative Balance Protection Changes the Outcome<\/h2>\r\n\r\n <h3>Without negative balance protection (how other brokers handle it)<\/h3>\r\n <div class=\"scenario-grid\">\r\n <div class=\"scenario-box bad\">\r\n <div class=\"sc-head bad\">\u274c Broker without protection<\/div>\r\n <div class=\"sc-body\">\r\n <div class=\"sc-row\"><span class=\"sc-key\">Initial deposit<\/span><span class=\"sc-val\">$500<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">Position size<\/span><span class=\"sc-val\">0.5 lot EURUSD @ 1:500<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">Market gaps against position<\/span><span class=\"sc-val\">150 pips<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">Loss on position<\/span><span class=\"sc-val sc-val red\">-$750<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">Account balance after close<\/span><span class=\"sc-val sc-val red\">-$250<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">Trader owes broker<\/span><span class=\"sc-val sc-val red\">$250<\/span><\/div>\r\n <\/div>\r\n <\/div>\r\n <div class=\"scenario-box good\">\r\n <div class=\"sc-head good\">\u2705 XM with negative balance protection<\/div>\r\n <div class=\"sc-body\">\r\n <div class=\"sc-row\"><span class=\"sc-key\">Initial deposit<\/span><span class=\"sc-val\">$500<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">Position size<\/span><span class=\"sc-val\">0.5 lot EURUSD @ 1:500<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">Market gaps against position<\/span><span class=\"sc-val\">150 pips<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">Loss on position<\/span><span class=\"sc-val sc-val red\">-$750<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">Balance before protection<\/span><span class=\"sc-val sc-val red\">-$250<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">XM absorbs deficit<\/span><span class=\"sc-val sc-val green\">$250 covered<\/span><\/div>\r\n <div class=\"sc-row\"><span class=\"sc-key\">Final account balance<\/span><span class=\"sc-val sc-val green\">$0 \u2014 no debt<\/span><\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n\r\n <p>The difference is significant. Without protection, the $500 deposit is not only lost \u2014 the trader now owes an additional $250. With XM's protection, the maximum loss is capped at the deposited amount. The trader loses their $500 but walks away owing nothing.<\/p>\r\n\r\n <hr class=\"divider\">\r\n\r\n <!-- SECTION 5 -->\r\n <h2 id=\"which-accounts\">Which XM Account Types and Regulated Entities Does Negative Balance Protection Apply To?<\/h2>\r\n <p>Unlike some brokers where negative balance protection is limited to EU-regulated clients only, XM applies it across all entities and all retail account types.<\/p>\r\n\r\n <div class=\"applies-wrap\">\r\n <table class=\"applies-table\">\r\n <thead>\r\n <tr><th>Account \/ Entity<\/th><th>Negative Balance Protection<\/th><th>Notes<\/th><\/tr>\r\n <\/thead>\r\n <tbody>\r\n <tr><td>Standard Account<\/td><td class=\"td-yes\">\u2713 Yes<\/td><td>All entities<\/td><\/tr>\r\n <tr><td>Micro Account<\/td><td class=\"td-yes\">\u2713 Yes<\/td><td>All entities<\/td><\/tr>\r\n <tr><td>Ultra Low Standard Account<\/td><td class=\"td-yes\">\u2713 Yes<\/td><td>All entities<\/td><\/tr>\r\n <tr><td>Ultra Low Micro Account<\/td><td class=\"td-yes\">\u2713 Yes<\/td><td>All entities<\/td><\/tr>\r\n <tr><td>Shares Account<\/td><td class=\"td-yes\">\u2713 Yes<\/td><td>All entities<\/td><\/tr>\r\n <tr><td>XM Global Limited (FSC Belize)<\/td><td class=\"td-yes\">\u2713 Yes<\/td><td>Global clients<\/td><\/tr>\r\n <tr><td>Trading Point Ltd (CySEC Cyprus)<\/td><td class=\"td-yes\">\u2713 Yes<\/td><td>EEA clients \u2014 required by ESMA<\/td><\/tr>\r\n <tr><td>Trading Point Pty Ltd (ASIC Australia)<\/td><td class=\"td-yes\">\u2713 Yes<\/td><td>Australian clients<\/td><\/tr>\r\n <tr><td>Trading Point MENA (DFSA Dubai)<\/td><td class=\"td-yes\">\u2713 Yes<\/td><td>Middle East clients<\/td><\/tr>\r\n <tr><td>Demo Account<\/td><td class=\"td-yes\">\u2713 N\/A<\/td><td>Virtual funds \u2014 no real risk<\/td><\/tr>\r\n <\/tbody>\r\n <\/table>\r\n <\/div>\r\n\r\n <div class=\"info-box\">\r\n <strong>EU regulatory requirement:<\/strong> For clients of the CySEC-regulated entity, negative balance protection is not optional \u2014 it is a mandatory requirement under ESMA regulations for all retail clients. For clients of the FSC Belize, ASIC, and DFSA entities, XM provides it voluntarily as part of its standard client protection policy.\r\n <\/div>\r\n\r\n <hr class=\"divider\">\r\n\r\n <!-- SECTION 6 -->\r\n <h2 id=\"when-void\">When XM Negative Balance Protection Does NOT Apply \u2014 Abuse Cases<\/h2>\r\n <p>XM's protection is designed for genuine market events \u2014 not for strategies that deliberately engineer negative balances to extract money from the broker. XM explicitly states in its terms that protection will not apply in cases of intentional abuse.<\/p>\r\n\r\n <div class=\"void-list\">\r\n <div class=\"void-item\">\r\n <div class=\"void-num\">1<\/div>\r\n <div class=\"void-text\"><strong>Cross trading between accounts in different names.<\/strong> If a trader opens buy positions on one account and sell positions on another account (in a different name, either at XM or at a different broker) to deliberately create losses and trigger the protection, XM will not cover the resulting negative balance. This includes coordinated trading between family members' accounts.<\/div>\r\n <\/div>\r\n <div class=\"void-item\">\r\n <div class=\"void-num\">2<\/div>\r\n <div class=\"void-text\"><strong>Arbitrage strategies exploiting price discrepancies.<\/strong> Using automated strategies to exploit momentary price differences between XM's platform and another system \u2014 including latency arbitrage \u2014 is prohibited. Negative balance protection does not cover losses generated through arbitrage approaches that violate XM's terms.<\/div>\r\n <\/div>\r\n <div class=\"void-item\">\r\n <div class=\"void-num\">3<\/div>\r\n <div class=\"void-text\"><strong>Fraudulent procurement of XM Points or bonuses.<\/strong> If a client abuses the bonus or loyalty points system \u2014 including using multiple accounts to generate artificial trading activity \u2014 and this results in a negative balance, protection is not applied to losses above the genuine deposited amount.<\/div>\r\n <\/div>\r\n <\/div>\r\n\r\n <p>Outside of these specific abuse scenarios, negative balance protection applies to all genuine trading losses regardless of the instrument, leverage level used, or the nature of the market event. Standard high-leverage trading that results in a gap-caused negative balance is fully covered.<\/p>\r\n\r\n <hr class=\"divider\">\r\n\r\n <!-- SECTION 7 -->\r\n <h2 id=\"limits\">The Critical Distinction \u2014 Protection from Debt vs Protection from Losing Your Deposit<\/h2>\r\n <p>This is the most commonly misunderstood aspect of negative balance protection, and it is important to be clear about it before trading with any leverage.<\/p>\r\n <p><strong>Negative balance protection prevents you from owing money to the broker.<\/strong> It does not prevent you from losing everything you deposited. The floor that protection sets is zero \u2014 not your original deposit amount.<\/p>\r\n <p>If you deposit $300 and your account is drawn down to zero through normal trading losses \u2014 stop-loss hit, positions closed, margin exhausted \u2014 negative balance protection does not apply because the balance has not gone below zero. You have simply lost your deposit through the normal mechanism of trading. Protection only activates when positions close at prices that push the balance past zero into negative territory.<\/p>\r\n\r\n <h3>What this means for risk management in practice<\/h3>\r\n <p>Negative balance protection is a safety net for extreme, sudden market events \u2014 not a substitute for position sizing and risk management. A trader using 1:1,000 leverage without stop-losses who holds positions through a major news announcement may lose their entire deposit before the protection threshold is ever reached. The protection covers the scenario where market conditions are so extreme that normal stop-out cannot prevent going negative \u2014 it does not cover ordinary trading losses, however large.<\/p>\r\n\r\n <div class=\"warn-box\">\r\n <strong>High leverage combined with negative balance protection does not make trading risk-free.<\/strong> You can still lose 100% of your deposited capital through normal market moves. Protection only prevents losses beyond 100% of your deposit. Always use appropriate position sizing and stop-loss orders regardless of the protection in place.\r\n <\/div>\r\n\r\n <div class=\"cta-inline\">\r\n <h3>Trade with XM's full suite of risk protections<\/h3>\r\n <p>Negative balance protection on all accounts. Margin call at 50%. Stop-out at 20%. NDD execution with no requotes. Minimum deposit $5.<\/p>\r\n <div class=\"cta-btns\">\r\n <a href=\"https:\/\/clicks.pipaffiliates.com\/c?c=376664&l=en&p=1\" class=\"btn-red\" target=\"_blank\" rel=\"noopener\">Open Protected Account \u2192<\/a>\r\n <a href=\"https:\/\/xemsignup.com\/xm-open-demo-account\" class=\"btn-outline btn-sm\">Try Demo First \u2192<\/a>\r\n <\/div>\r\n <\/div>\r\n\r\n <hr class=\"divider\">\r\n\r\n <!-- FAQ -->\r\n <h2 id=\"faq\">Frequently Asked Questions \u2014 XM Negative Balance Protection<\/h2>\r\n <div class=\"faq-list\">\r\n <div class=\"faq-item\">\r\n <div class=\"faq-q\" onclick=\"toggleFaq(this)\" tabindex=\"0\" aria-expanded=\"false\">\r\n <span>What is XM's negative balance protection and how does it work?<\/span>\r\n <svg class=\"faq-ico\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"2\"><line x1=\"12\" y1=\"5\" x2=\"12\" y2=\"19\"\/><line x1=\"5\" y1=\"12\" x2=\"19\" y2=\"12\"\/><\/svg>\r\n <\/div>\r\n <div class=\"faq-a\">XM's negative balance protection automatically resets any account balance that drops below zero back to zero. If extreme market volatility causes losses beyond your deposited funds after stop-out, XM absorbs the deficit. The reset is immediate and automatic \u2014 no claim or support request is needed. You will never owe XM money regardless of what happens in the market.<\/div>\r\n <\/div>\r\n <div class=\"faq-item\">\r\n <div class=\"faq-q\" onclick=\"toggleFaq(this)\" tabindex=\"0\" aria-expanded=\"false\">\r\n <span>Does XM negative balance protection apply to all account types?<\/span>\r\n <svg class=\"faq-ico\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"2\"><line x1=\"12\" y1=\"5\" x2=\"12\" y2=\"19\"\/><line x1=\"5\" y1=\"12\" x2=\"19\" y2=\"12\"\/><\/svg>\r\n <\/div>\r\n <div class=\"faq-a\">Yes. XM provides negative balance protection across all retail account types \u2014 Standard, Micro, Ultra Low Standard, Ultra Low Micro, and Shares \u2014 and across all four regulated entities (FSC Belize, CySEC Cyprus, ASIC Australia, DFSA Dubai). Protection is applied on a per-account basis, meaning each account is assessed individually regardless of other accounts held under the same profile.<\/div>\r\n <\/div>\r\n <div class=\"faq-item\">\r\n <div class=\"faq-q\" onclick=\"toggleFaq(this)\" tabindex=\"0\" aria-expanded=\"false\">\r\n <span>What is the margin call and stop-out level at XM?<\/span>\r\n <svg class=\"faq-ico\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"2\"><line x1=\"12\" y1=\"5\" x2=\"12\" y2=\"19\"\/><line x1=\"5\" y1=\"12\" x2=\"19\" y2=\"12\"\/><\/svg>\r\n <\/div>\r\n <div class=\"faq-a\">XM issues a margin call warning when your margin level falls to 50% \u2014 no positions are closed at this point. If the margin level continues falling to 20%, XM's system automatically begins closing your open positions starting with the least profitable one (stop-out). Negative balance protection activates if positions are closed at prices that result in a balance below zero after the stop-out process completes.<\/div>\r\n <\/div>\r\n <div class=\"faq-item\">\r\n <div class=\"faq-q\" onclick=\"toggleFaq(this)\" tabindex=\"0\" aria-expanded=\"false\">\r\n <span>Can I lose more money than I deposited when trading with XM?<\/span>\r\n <svg class=\"faq-ico\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"2\"><line x1=\"12\" y1=\"5\" x2=\"12\" y2=\"19\"\/><line x1=\"5\" y1=\"12\" x2=\"19\" y2=\"12\"\/><\/svg>\r\n <\/div>\r\n <div class=\"faq-a\">No. XM's protection ensures you cannot owe more than your deposited balance. If market conditions push your balance below zero, XM covers the shortfall and resets your account to zero. However, you can still lose your entire deposit through normal trading losses \u2014 the protection prevents debt to the broker, not loss of your deposited capital.<\/div>\r\n <\/div>\r\n <div class=\"faq-item\">\r\n <div class=\"faq-q\" onclick=\"toggleFaq(this)\" tabindex=\"0\" aria-expanded=\"false\">\r\n <span>When does XM negative balance protection NOT apply?<\/span>\r\n <svg class=\"faq-ico\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"2\"><line x1=\"12\" y1=\"5\" x2=\"12\" y2=\"19\"\/><line x1=\"5\" y1=\"12\" x2=\"19\" y2=\"12\"\/><\/svg>\r\n <\/div>\r\n <div class=\"faq-a\">Protection does not apply in cases of deliberate abuse: cross trading between accounts held in different names to generate artificial losses; arbitrage strategies that exploit system price differences; and fraudulent use of XM Points or bonus programs. These are intentional strategies to exploit the protection mechanism. For genuine market-caused negative balances from normal trading, the protection always applies.<\/div>\r\n <\/div>\r\n <div class=\"faq-item\">\r\n <div class=\"faq-q\" onclick=\"toggleFaq(this)\" tabindex=\"0\" aria-expanded=\"false\">\r\n <span>Does negative balance protection prevent me from losing my entire deposit?<\/span>\r\n <svg class=\"faq-ico\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"2\"><line x1=\"12\" y1=\"5\" x2=\"12\" y2=\"19\"\/><line x1=\"5\" y1=\"12\" x2=\"19\" y2=\"12\"\/><\/svg>\r\n <\/div>\r\n <div class=\"faq-a\">No. Negative balance protection prevents your account from going below zero \u2014 it does not prevent you from losing all of your deposited funds. You can lose 100% of your deposit through normal trading losses. The protection only activates in situations where market conditions would push your balance past zero into negative territory \u2014 meaning you would otherwise owe the broker money.<\/div>\r\n <\/div>\r\n <div class=\"faq-item\">\r\n <div class=\"faq-q\" onclick=\"toggleFaq(this)\" tabindex=\"0\" aria-expanded=\"false\">\r\n <span>How quickly does XM reset a negative balance to zero?<\/span>\r\n <svg class=\"faq-ico\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"2\"><line x1=\"12\" y1=\"5\" x2=\"12\" y2=\"19\"\/><line x1=\"5\" y1=\"12\" x2=\"19\" y2=\"12\"\/><\/svg>\r\n <\/div>\r\n <div class=\"faq-a\">The reset is immediate and automatic once positions are closed and the balance goes negative. No action is required from the trader. The correction also applies immediately upon any additional deposit, exchange of XM Points to cash, or fund transfer from another XM account with a positive balance into the negative account.<\/div>\r\n <\/div>\r\n <\/div>\r\n\r\n <hr class=\"divider\">\r\n\r\n <h2>Related guides<\/h2>\r\n <div class=\"related-grid\">\r\n <a href=\"https:\/\/xemsignup.com\/xm-advantages\" class=\"related-card\">\r\n <div class=\"rl\">Advantages<\/div>\r\n <div class=\"rt\">All XM Trading Advantages<\/div>\r\n <div class=\"ra\">Read guide \u2192<\/div>\r\n <\/a>\r\n <a href=\"https:\/\/xemsignup.com\/xm-leverage\" class=\"related-card\">\r\n <div class=\"rl\">Leverage<\/div>\r\n <div class=\"rt\">XM Leverage Up to 1:1,000<\/div>\r\n <div class=\"ra\">Read guide \u2192<\/div>\r\n <\/a>\r\n <a href=\"https:\/\/xemsignup.com\/xm-fund-safety\" class=\"related-card\">\r\n <div class=\"rl\">Fund Safety<\/div>\r\n <div class=\"rt\">How XM Protects Client Funds<\/div>\r\n <div class=\"ra\">Read guide \u2192<\/div>\r\n <\/a>\r\n <a href=\"https:\/\/xemsignup.com\/xm-open-real-account\" class=\"related-card\">\r\n <div class=\"rl\">Get Started<\/div>\r\n <div class=\"rt\">How to Open an XM Real Account<\/div>\r\n <div class=\"ra\">Read guide \u2192<\/div>\r\n <\/a>\r\n <\/div>\r\n\r\n <\/div>\r\n<\/main>\r\n\r\n<footer>\r\n <div class=\"container-wide\">\r\n <div class=\"footer-inner\">\r\n <div>\r\n <div class=\"footer-brand\">xemsignup.com<\/div>\r\n <p class=\"footer-note\">Independent affiliate website. Not an official XM Group website. Protection details sourced from XM Global's Open Execution Policy and official terms and conditions.<\/p>\r\n <\/div>\r\n <div class=\"footer-links\">\r\n <a href=\"https:\/\/xemsignup.com\/\">Home<\/a>\r\n <a href=\"https:\/\/xemsignup.com\/xm-open-real-account\">Open Real Account<\/a>\r\n <a href=\"https:\/\/xemsignup.com\/xm-advantages\">XM Advantages<\/a>\r\n <a href=\"https:\/\/xemsignup.com\/xm-leverage\">XM Leverage<\/a>\r\n <a href=\"https:\/\/xemsignup.com\/xm-faq\">FAQ<\/a>\r\n <\/div>\r\n <\/div>\r\n <div class=\"risk-strip\">\r\n <div class=\"container-wide\">\r\n <strong>\u26a0 Risk Warning:<\/strong> Negative balance protection prevents debt to the broker but does not prevent loss of deposited capital. Forex and CFD trading involves significant risk. XM Global Limited does not accept clients from the USA, Canada, Israel, and Iran. Regulated entities: XM Global Limited (FSC Belize 000261\/397) \u00b7 Trading Point of Financial Instruments Ltd (CySEC 120\/10) \u00b7 Trading Point of Financial Instruments Pty Ltd (ASIC AFSL 443670) \u00b7 Trading Point MENA Limited (DFSA F003484). <strong>Affiliate Disclosure:<\/strong> This site receives compensation when visitors open accounts via links on this page.\r\n <br>\u00a9 2026 xemsignup.com \u2014 Independent Affiliate Site\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n<\/footer>\r\n\r\n<script>\r\nfunction toggleFaq(el){\r\n const item=el.parentElement;\r\n const isOpen=item.classList.contains('open');\r\n document.querySelectorAll('.faq-item.open').forEach(i=>{i.classList.remove('open');i.querySelector('.faq-q').setAttribute('aria-expanded','false');});\r\n if(!isOpen){item.classList.add('open');el.setAttribute('aria-expanded','true');}\r\n}\r\ndocument.querySelectorAll('.faq-q').forEach(q=>{\r\n q.addEventListener('keydown',e=>{if(e.key==='Enter'||e.key===' '){e.preventDefault();toggleFaq(q);}});\r\n});\r\ndocument.querySelectorAll('a[href^=\"#\"]').forEach(a=>{\r\n a.addEventListener('click',e=>{e.preventDefault();const t=document.querySelector(a.getAttribute('href'));if(t)t.scrollIntoView({behavior:'smooth',block:'start'});});\r\n});\r\n<\/script>\r\n<\/body>\r\n<\/html>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>    Home \u203a XM Advantages \u203a Negative Balance Protection XM Advantages \u2014 Safety XM Negative Balance Protection \u2014 How the Zero-Reset Works, When It Applies, and Its Limits XM’s negative balance protection automatically resets any account balance that goes below zero back to zero. If a market moves so fast that stop-out cannot prevent […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"elementor_header_footer","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2563","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"trp-custom-language-flag":false},"uagb_author_info":{"display_name":"nurhadi.bisnis@gmail.com","author_link":"#"},"uagb_comment_info":0,"uagb_excerpt":"    Home \u203a XM Advantages \u203a Negative Balance Protection XM Advantages \u2014 Safety XM Negative Balance Protection \u2014 How the Zero-Reset Works, When It Applies, and Its Limits XM’s negative balance protection automatically resets any account balance that goes below zero back to zero. If a market moves so fast that stop-out cannot prevent…","_links":{"self":[{"href":"https:\/\/xemsignup.com\/fa_af\/wp-json\/wp\/v2\/posts\/2563","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xemsignup.com\/fa_af\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xemsignup.com\/fa_af\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xemsignup.com\/fa_af\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/xemsignup.com\/fa_af\/wp-json\/wp\/v2\/comments?post=2563"}],"version-history":[{"count":6,"href":"https:\/\/xemsignup.com\/fa_af\/wp-json\/wp\/v2\/posts\/2563\/revisions"}],"predecessor-version":[{"id":2569,"href":"https:\/\/xemsignup.com\/fa_af\/wp-json\/wp\/v2\/posts\/2563\/revisions\/2569"}],"wp:attachment":[{"href":"https:\/\/xemsignup.com\/fa_af\/wp-json\/wp\/v2\/media?parent=2563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xemsignup.com\/fa_af\/wp-json\/wp\/v2\/categories?post=2563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xemsignup.com\/fa_af\/wp-json\/wp\/v2\/tags?post=2563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}