Margin Call vs Stop Out Level

Margin Call:

A margin call happens when your brokerage informs you that the balance of your trading account has dropped below the required margin (%) and there is not enough equity (floating profit, floating losses, or unused balance) to support your open orders any further.

In another way, a margin call is a broker’s demand on an investor to use the margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin. Margin calls occur when your account value depresses to a value calculated by the broker’s particular formula.

How it works:

The Fxglory margin call on a standard account is 60%, and the stop-out level is 30%.

It means that when your equity reaches 60% of the required margin, you will get a warning, either a highlight on your platform, a certain message, or an email. It warns you that your equity is now insufficient to continue trading and maintaining currently active positions, and that means that you have to either think of closing some of them or add more funds to the account to meet the minimum margin requirements.

If you don’t do so, you’ll be approaching the stop-out level, at which the system will perform an automated closure of your unprofitable trades, starting from the least profitable and continuing until the minimum margin requirements are met.