What is Margin Level?

Q: What is Margin Level?

Margin level is equity divided by used margin, as a percent. Here's how it falls, how it triggers a margin call and stop-out, with a worked example.

Margin level is the single percentage that tells your broker — and you — how much trouble your open positions are in. It is equity divided by the margin those positions are using, shown as a percent. A high number means plenty of breathing room. A falling number means your trades are moving against you and the buffer is thinning. Cross the broker's thresholds and the platform starts closing trades for you.

The formula

Margin level = (equity ÷ used margin) × 100

If your equity is £8,000 and your open trades are using £2,000 of margin:

(8,000 ÷ 2,000) × 100 = 400%

With no trades open there is no used margin, so the platform shows no margin level at all. It only exists while you have exposure.

How the number moves

Used margin is roughly fixed while the trades stay open — it was set when you opened them. So margin level rises and falls almost entirely with equity. Winning positions push equity up and the percentage climbs. Losing positions drag equity down and the percentage falls. This is why margin level is an early-warning gauge: it tracks your floating losses in real time, long before anything is closed.

Margin call and stop-out

Brokers set two thresholds, both as margin-level percentages:

Margin call — often around 100%. Equity has fallen to meet used margin. You can no longer open new trades, and the broker warns you to add funds or close positions.
Stop-out — often around 50%. The broker stops waiting and starts closing your positions, worst first, until margin level recovers.

The exact levels vary by broker, so check yours. The mechanism is the same everywhere: as floating losses eat equity, margin level falls toward these lines.

A worked example

Equity £8,000, used margin £2,000 — margin level 400%. Comfortable.

Your open trades now float -£6,000. Equity drops to £2,000, used margin unchanged at £2,000:

(2,000 ÷ 2,000) × 100 = 100% — margin call.

The trades keep falling. Equity reaches £1,000:

(1,000 ÷ 2,000) × 100 = 50% — stop-out. The broker begins closing positions whether you like it or not.

Margin level is the number the broker watches to decide when to close your trades for you. Watching it yourself, before it reaches 100%, is how you stay the one making the decisions.

Why it matters

A single margin level covers the whole account, so one runaway EA can drag every other position toward the stop-out with it — the broker closes on the account total, not per strategy. Grid and martingale systems are the ones that quietly march this number down, holding losers open while equity bleeds. Watching margin level, and setting an alert well above 100%, turns a forced liquidation into a decision you make in time.

Set your own line

The broker's stop-out is a backstop, not a plan. By the time it fires you have already taken most of the damage — a 50% stop-out means roughly half the equity behind those trades is gone, and the broker closes at market, often at the worst possible moment. Deciding your own margin-level floor, comfortably above 100%, and acting the moment you reach it keeps the exit in your hands rather than the broker's.

The Karnek note

Karnek tracks margin level live across every account you connect and can alert you as it falls toward your broker's thresholds — before the margin call, not after. It is strictly read-only through the investor password and can never place or close a trade.

See it in Karnek: see how Karnek works.