Is it possible to insure your investments in the forex or stock market?

If you live in Europe or America, you quickly realize that almost everything is insured here, from real estate to financial risks and personal liability.

A reasonable question arises: is it possible to insure yourself against losses resulting from stock trading or investments?

In this case, investments will receive the maximum degree of protection, and there is no need to fear losses if the price changes for the worse.

Indeed, this type of insurance exists, and if you wish, you can insure your investments, albeit with a lot of reservations and restrictions.

When you can't insure your investment

When using margin trading - that is, if you use leverage when opening trades. With this trading option, the risks increase in proportion to the size of the leverage, and no one will undertake to insure such operations.

When trading on the foreign exchange market , insurance companies are almost never involved in insuring transactions on the foreign exchange market. That is, if you enter into Forex transactions, you can forget about insurance.

If your broker does not meet the requirements set by the insurance company, does not have all the necessary licenses to operate.

What can be insured

Broker bankruptcy or refusal to fulfill obligations is one of the main types of insurance that insurers willingly provide. In this case, you will receive a payment if your broker goes bankrupt and cannot fulfill its obligations.

However, it should be noted that brokers themselves often insure the funds of their clients and do it completely free of charge, for example, in the same brokerage company Amarkets, client accounts are already insured with The Financial Commission in the amount of 20,000 euros.

Fixed amount of losses - if the price of the shares you purchased falls, you receive a compensation amount in a certain amount.

For example, if your losses are insured for $1,000, and you lost $1,500, the payment will be only $1,000; if the amount of losses is less than the amount of insurance, only the amount of losses will be paid.

This type of insurance is used with a lot of reservations, but you can still find a company that will insure your investments in securities against unfavorable market fluctuations.

Due to the fact that it is quite difficult to obtain full insurance in case of losses, most traders prefer to resort to other methods of risk insurance.

Individual investors prefer to diversify their investments , while large investment companies always hedge their positions .