What a negative balance is
A negative balance means your account lost more than the money in it — you are, on paper, in debt to the broker. It happens when a position moves so fast that the stop-out cannot close it before losses exceed your funds, typically during a violent move or a large gap.
How it happens
A sudden gap over a weekend or a shock event jumps far past your stop and past the stop-out level, all in one move with no tradeable prices in between. High leverage magnifies the effect. By the time positions close, the loss is bigger than the account balance.
Do you owe the money?
It depends on negative balance protection. Many regulated brokers, especially for retail clients in certain regions, offer it and will reset a negative balance to zero, so you cannot lose more than you deposited. Without such protection, you could in principle be asked to cover the shortfall. Check your broker's terms and your regulatory protections.
How to prevent it
Use modest leverage and small positions so a gap cannot wipe you out. Be especially cautious holding leveraged trades over weekends and through major events. Prefer brokers that clearly offer negative balance protection, and consider guaranteed stops where the risk warrants it.
Broker's fault or yours?
The underlying cause is usually leverage and gap risk on your side. But whether you are chased for the shortfall depends entirely on the broker's protection and your regulatory status — which is exactly why those protections matter when choosing where to trade.