The stop out level is the point at which your broker stops asking politely and starts closing your trades for you. It is set as a margin level — a percentage — and when your account falls to it, the broker force-closes positions, worst loser first, until the account climbs back above the line. It exists to stop your losses running past your deposit and leaving you owing money.
What it is
Margin level is your equity divided by the margin currently in use, times 100. The stop out level is the value of that percentage at which forced closing begins. A common figure is 50%, though brokers vary — some sit at 20%, some at 100%. If your broker's stop out is 50%, positions start closing once your margin level touches 50%.
Two numbers usually work together:
- Margin call level — a warning. No action, just a flag that you are getting close.
- Stop out level — the action. The broker closes trades without asking.
A worked example
You deposit £2,000 and open a position that uses £500 of margin, leaving £1,500 free. Your broker's margin call is 100% and its stop out is 50%.
- Margin level starts at 2,000 ÷ 500 × 100 = 400%. Comfortable.
- The trade goes against you. When floating losses reach £1,500, equity is £500, and margin level is 500 ÷ 500 × 100 = 100%. Margin call — the warning fires.
- Losses deepen to £1,750. Equity is £250, margin level is 250 ÷ 500 × 100 = 50%. Stop out. The broker closes the position, leaving you about £250.
You did not choose to close. The broker did it to protect itself, and in doing so it locked in a £1,750 loss.
Grid and martingale EAs are the classic victims here. They hold a basket of open trades, so the used margin is large and a single sharp move can march the whole account from healthy to stopped out in minutes. When it goes, everything closes at once.
Why it matters
The stop out is not a safety net you should ever plan to touch. By the time it triggers you have already taken a heavy loss and lost the choice of when to exit. A sensible account keeps its margin level high enough that the stop out stays a distant abstraction rather than a monthly event.
For anyone running an EA, the stop out is also a blunt failure mode: the robot's logic becomes irrelevant the moment the broker takes over. A grid that "never loses" on the backtest can be flattened in one session because the account ran out of margin, not because the strategy was wrong on direction.
What to check
- Your broker's exact figures. Stop out varies by broker and sometimes by account type. Find the number before you need it.
- How positions are closed. Most brokers close the largest loser first, then re-check. Some close everything.
- Your margin level right now. A three-digit number means you are fine; a figure dropping toward the stop out means size down before the broker decides for you.
The Karnek note
Karnek reads your live margin level from the terminal and shows how much room you have above the stop out, so a dangerous account is visible before the broker acts. It watches only — read-only, and it can never open or close a position on your behalf.
Written and reviewed by the Karnek Research team. Last updated August 2026.
Educational content only - not financial advice. Past performance does not predict future results. Trading carries significant risk.