Margin Level, Margin Call and Stop Out Explained
Margin level = equity ÷ used margin × 100%. When it falls to your broker's margin call level you get a warning; at the stop-out level the platform starts closing your positions, biggest loser first. Levels differ by broker and account, so check yours. In the EU the close-out for retail clients is set at 50% of required margin.
The four numbers on your terminal
| Term | Meaning |
|---|---|
| Balance | Deposits plus closed profit and loss |
| Equity | Balance plus the profit or loss on open positions |
| Margin (used) | Total margin locked by open positions |
| Free margin | Equity minus used margin: what’s left to open new trades |
Margin level (%) = equity ÷ used margin × 100
Worked example
You deposit $1,000 and buy 1 lot of EUR/USD at 1.0800 at 500:1 leverage. Used margin is $108,000 ÷ 500 = $216.
| Market move | Equity | Margin level |
|---|---|---|
| Entry | $1,000 | 463% |
| −30 pips (−$300) | $700 | 324% |
| −60 pips (−$600) | $400 | 185% |
| −76 pips (−$760) | $240 | 111% |
| −87 pips (−$870) | $130 | 60% |
If your broker’s margin call is at 100% and stop out at 50%, you’d get a warning after about 78 pips and be closed out after roughly 89 pips against you. The same trade at 0.1 lots would need about 990 pips to reach stop out. Position size, not the leverage setting, is what decides how far the market can move against you. Work it through in the margin calculator.
Margin call and stop-out levels
Each broker sets its own levels, sometimes per account type, and publishes them on its account or trading-conditions pages. Check those pages for your account before you trade. For EU retail clients, ESMA’s rules set the close-out at 50% of required margin per account.
Some brokers also count bonus credit as part of equity, which delays the stop out. If the credit disappears when you withdraw, your margin level can drop sharply. See how bonuses work.
What happens at stop out
The platform closes positions, usually starting with the one making the largest loss, until the margin level is back above the stop-out level. In a gap the closing price can be far worse than the level itself, and the account can go negative. Negative balance protection is what stops you owing money then.
Keeping clear of stop out
- Size trades from your stop-loss and risk per trade, not from free margin. The lot calculator does this.
- Keep effective leverage (position value ÷ equity) modest. See leverage explained.
- Be careful holding positions over weekends or into major data.
Our risk management guide puts these together into a routine.
Forex Brokers With Negative Balance Protection 2026
| Broker | Licence | Visit broker | |||
|---|---|---|---|---|---|
 XMFeatured | 4.9/5Editorial rating | ✓ | 1,000:1 | FSC Belize | Visit |
 Vantage | 4.3/5 | ✓ | Unlimited | FSCA South Africa 51268 | Visit |
 Exness | 4.2/5 | ✓ | 2,000:1 | FSA Seychelles SD025, CBCS Curaçao, FSC BVI, FSC Belize, F… | Visit |
 HFM | 4.1/5 | ✓ | 2,000:1 | CySEC 183/12, FCA 801701, FSCA 46632, FSA SD015, CMA 155 | Visit |
 XS.com | 4.1/5 | ✓ | 2,000:1 | FSA Seychelles SD089 | Visit |
 FXGT | 4.1/5 | ✓ | 5,000:1 | FSA Seychelles SD019 | Visit |
 Titan FX | 3.7/5 | ✓ | 2,000:1 | Vanuatu FSC | Visit |
 easyMarkets | 3.7/5 | ✓ | 2,000:1 | EF Worldwide Ltd, FSA Seychelles securities dealer | Visit |
 EBC Financial | 3.5/5 | ✓ | 500:1 | EBC Financial Group | Visit |
 AXIORY | 3.4/5 | ✓ | 2,000:1 | FSC Belize 4496214 | Visit |
 BigBoss | 3.2/5 | ✓ | 2,222:1 | Comoros | Visit |
See all: Forex Brokers With Negative Balance Protection 2026
Related
- Margin Level Calculator
- Stop-Out Level Calculator
- What Is Offshore Forex Trading? How It Works and Who It's For
- Is Offshore Forex Trading Legal? What Regulators Say
- Regulated vs Offshore Forex Brokers: Leverage, Protection and Tax
- Forex Leverage Explained With Worked Examples
- Negative Balance Protection Explained
- Lot Size in Forex: Standard, Mini and Micro Lots
- What Is a Pip in Forex and How to Calculate It
- What Is Spread in Forex and When Does It Widen
- Forex Swap and Rollover Explained
- Hedging Rules at Forex Brokers
- How to Choose a Forex Account Type: Standard, ECN or Cent
- How Forex Bonuses Work: Withdrawal Conditions Explained
- Forex Cashback Rebates Explained
- Using Multiple Forex Broker Accounts: Pros and Rules
- Forex Inactivity Fees by Broker
- Forex Glossary
Frequently asked questions
What is a good margin level?
There is no official figure, but the higher the better. A margin level in the thousands of percent means plenty of room; one near your broker's margin call level means a small move can trigger a stop out.
What is the difference between margin call and stop out?
A margin call is a warning that your margin level is low. Stop out is the level at which the broker automatically starts closing positions.
How do I raise my margin level?
Deposit more, close or reduce positions, or wait for open positions to move in your favour. Lowering leverage doesn't help, because it increases the margin each position uses.
Can a stop out leave me with a negative balance?
Yes, if the market gaps past the stop-out level. Negative balance protection, where offered, resets the balance to zero.