What happens between a margin call and a stop out
Most traders meet the stop-out level for the first time on the day it fires, which is the worst possible moment to learn what it does. The sequence is not mysterious, and both thresholds are visible in your account before you place a single trade.
The one ratio everything hangs on
margin level = equity / used margin × 100%Equity is your balance plus the open profit and loss. Used margin is what the margin calculator reports, summed across open positions. When equity falls, the ratio falls — the denominator does not move unless you open or close something.
The three thresholds
Brokers publish these as percentages of margin level, and the exact numbers vary:
| Stage | Typical level | What the broker does |
|---|---|---|
| Warning | 100% | Notifies you; you can still trade |
| Margin call | 100% or below | New positions blocked; existing ones stay open |
| Stop out | 50% or below | Positions closed automatically, largest loss first |
The word “call” is a leftover from the era when a broker phoned you and asked for more money. On a retail CFD account nobody calls, and nobody waits: the platform closes positions on its own.
Why sizing is the actual defence
By the time margin level is near the stop-out threshold, your options are to deposit or to close something at a loss you did not choose. Neither is a plan. The decision that determines whether you ever get there was made earlier, when you chose the position size — which is why the position size calculator reports required margin next to the recommended size rather than hiding it.
A rough guide worth holding on to: if a normal-sized position for your strategy uses more than a quarter of your equity as margin, a routine losing streak will take you into the range where the broker starts making decisions for you.