Module 2: Trading Fundamentals
Stop-Out
4 min read
At the stop-out level the broker automatically closes positions to stop further losses.
How stop-out works
If margin level falls to the stop-out threshold (for example 50%), the platform starts closing positions, usually the largest loser first, until the margin level recovers.
In fast markets, prices can gap, so the closing price may be worse than expected. Some regulators require negative balance protection for retail clients; check whether it applies to your account.
Key takeaways
- Stop-out closes trades automatically.
- Gaps can cause losses beyond expectations.
- Check whether negative balance protection applies.
Educational content only, not financial advice. Trading forex and CFDs involves significant risk of loss.