Please, help me to understand how no stop loss will work for me with buy position on eToro.

With the conditions:

  • Open BUY (Long) position
  • Leverage: x1
  • Initial Investment: 1,000 USD
  • APPLE STOCK (AAPL) Ask rate: 250 USD
  • Position: Open 4 units AAPL BUY

If I set no stop loss, should this mean that I lose all 1000 USD only in the case, when AAPL stock will drop to 0 USD (what is almost unreal) or in CFD stock price may somehow get negative values?

1 Answer 1


Stock prices can not be smaller that zero, but remember that you pay for the ask price and you get the bid price (the difference is the spread). Some brokers might also charge commissions for each order and on top of that they usually charge overnight fees. With the current Forex brokers your equity can't be negative, so if all the factors named above are considered, your money would be wiped (you'd get a margin call) a bit before the stock price reaches zero.

In your case let's assume that you pay a fixed spread of 95 cents (I know we normally refer to pips, but let's keep it in cents for simplicity), and a rollover (overnight fee) of 5 cents per night (this ones depend on the order size). From the day that you open the position your implied losses will be 0.95+0.05*x, where x is the number of nights you hold the order open. So after 3 weeks you have lost 2 USD, which means that you'd get a margin call when the stock price drops below 0.5 USD, not 0. So yeah, if I get the point of your question you probability won't have a margin call with a 1:1 leverage and you can have the certainty that the prices can drop significantly and your money (most of it) will still be available.

For a short position this is totally not the case, the prices can always rise more and the chances of a margin call with a 1:1 leverage could become significant.

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