Important
A Stop Out happens when your margin level falls too low to maintain open positions.
When this happens, positions begin closing automatically to free up margin and protect the account from going negative.
What this means
A Stop Out usually occurs when:
The trade size is too large for the account balance
Open positions are already heavily losing
Available equity becomes too low compared to used margin
When the margin level drops below the broker’s Stop Out threshold, positions may start closing automatically.
In many cases, this threshold is around 100% margin level, but exact values depend on the broker or prop firm.
Why positions close automatically
The Stop Out mechanism exists to prevent the account from completely exhausting available funds.
Instead of leaving all losing positions open indefinitely, the system gradually closes positions to:
Reduce margin usage
Restore margin level
Protect the account from deeper losses
Common examples
Examples include:
Trades closing automatically during heavy losses
Multiple positions closing one after another
Margin level dropping rapidly during volatility
Large lot sizes causing insufficient free margin
Useful to know
This article applies specifically to Stop Out events and automatic margin-based closures.
It does not apply to unrelated trade execution concerns.