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.
About Mike Druttman
