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Stop-out level

The margin level at which a broker automatically starts closing your open positions, commonly 50% but set by the firm and by the rules of its regulator.

Stop-out is not a request, it is an action. The platform closes positions without instruction, usually starting with the largest loser, and keeps going until the margin level is back above the threshold. Everything closes at whatever price is available, which during a gap can be far from the last quote.

Thresholds vary widely: 50% is the common retail setting, some firms use 20% or 30%, and a few tier it, warning at 100% and cutting at 50%. Under esma-leverage-caps and the associated rules, retail accounts in the affected jurisdictions are subject to a fixed 50% margin-close-out-rule applied to the account as a whole.

Treating stop-out as a risk control is a category error. It fires after the damage, at the worst possible liquidity, and it is designed to protect the broker's balance sheet rather than yours. A stop-loss placed in advance does the job properly.

Example: used margin $3,613 and a 50% stop-out. Positions are liquidated when equity reaches $1,807. From a $10,000 starting balance that is an 82% loss before the safety net even engages.

Related: margin-level, margin-close-out-rule, negative-balance-protection, margin-call

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

Margin and leverageA small deposit controlling a much larger position, and the point at which losses trigger a margin call.Position you controlnotional value $100,000your margin deposit: $5,000$100,000 / $5,000 = 20:1 leverageYour deposit absorbs every dollar of loss$5,000$2,500$0Equity leftMARGIN CALLequity has fallen to $2,5000%1%2%2.5%3%4%5%How far the price moves against you
Margin and leverage. A $5,000 deposit can control a $100,000 position, which is 20:1 leverage. Because the loss is measured on the full $100,000, a 2.5% move against you halves the deposit and brings a margin call, and a 5% move uses all of it.

Educational only, not advice. Spotted an error? Post in Site Feedback.