Margin Call and Stop-Out: When a Broker Closes Your Positions

A stop-out is the point where the broker stops waiting and closes your trades for you. It is measured by margin level: equity / used margin × 100%.

Two thresholds

100% — margin call. Equity has fallen to the level of your margin. No new positions can be opened. The terminal highlights the row; some brokers send an email.

50% — stop-out. The broker starts closing positions until the level recovers. The 50% floor for retail clients comes from ESMA rules; offshore arms sometimes run 20% or even 0%.

This is not caused by the market

A stop-out always follows from position size, not from price movement. A $2,000 account holding 0.05 lots survives a thousand-pip move. The same account holding one lot dies at 92 pips.

Hence the rule: if you have ever seen a margin call, the problem is neither your strategy nor your broker. It is your lot size.

Adding money does not fix it

A top-up raises equity and pushes the stop-out further away, but the position size is unchanged. You are buying a little more room at the same cost per pip. The right response is to close part of the position, not to fund the account.

Read next

• Margin and margin level
• Drawdown and how to measure it
• Negative balance protection