Margin level and the stop-out, explained

Margin level is the single percentage your broker uses to decide when your account is too stretched to keep its positions open. When it falls far enough, the broker force-closes trades for you — a stop-out. It’s the rule that can close your positions without you clicking anything. Broker thresholds and formulas vary, so treat the numbers below as the common pattern, not gospel — this is a plain-language explainer, not advice, and your own broker’s terms are what count.

What the number actually is

On MetaTrader and most platforms, margin level is:

• Margin level % = (Equity ÷ Used Margin) × 100.

Equity is your balance plus or minus open-trade P/L (and any swap or fees). Used margin is what your open positions have locked up as collateral. So the percentage falls two ways: equity drops (trades move against you), or used margin rises (you add or scale into positions). A high percentage means lots of headroom; a low one means the collateral is close to being exhausted.

Margin call, then stop-out

Brokers usually define two levels. The margin call level (for example 100%) is a warning: you can’t open new positions and you’re expected to add funds or reduce risk. The stop-out level (for example 50%) is the hard one: at or below it, the broker begins closing your positions — typically the largest losing one first — until the account is back above the line.

The exact numbers differ by broker and instrument, and leveraged products move these levels faster. The mechanic is the constant: below the stop-out level, the decision to close is no longer yours. (On crypto exchanges the equivalent is a liquidation against your maintenance margin — a different name for the same idea.)

A worked example

• Equity $10,000, used margin $2,000 → margin level 500%. Comfortable.
• Positions move against you; equity falls to $2,200 while used margin is unchanged → margin level 110%. You’re closing in on the 100% margin-call level — drop to it and you’d no longer be able to open new positions.
• The move continues to equity $1,000 → margin level 50%. At a 50% stop-out level, the broker starts closing positions for you, locking in the loss.

Why it lands while you’re away

Margin level is most dangerous exactly when you’re not watching. A gap over a weekend, an overnight move, or a news spike can drag equity down while the terminal sits on a VPS you aren’t looking at. The platform shows the number, but only on that screen — there’s no tap on the shoulder as it slides toward the stop-out.

That’s the case for a threshold you set once and then forget about: an early warning as margin level approaches your line, on MetaTrader accounts and exchange accounts alike, reaching your phone rather than a terminal you’ve closed. That’s what Chartping watches — read-only by design, so it warns you and never opens, closes or modifies a position itself.

Margin level is one of three account rules worth watching. Its siblings are the maximum daily loss and trailing drawdown limits — different mechanics, same lesson about lines that move while your attention is elsewhere. Or check your margin level with the calculator.

No promise about outcomes here — alerts are best-effort and a stop-out is your broker’s mechanism, not ours. The point is only to remove the surprise.

Frequently asked

What’s the difference between a margin call and a stop-out?

A margin call is a warning level where you usually can’t open new positions and are expected to act; a stop-out is a lower level where the broker itself starts closing your positions to protect the account.

How is margin level calculated?

Equity divided by used margin, times 100. It falls when equity drops (losing trades) or when used margin rises (more or larger positions).

Can I get warned before a stop-out?

Your platform shows the percentage while you’re watching it. A monitoring tool can send an early warning as margin level approaches a threshold you set and reach your phone when the terminal isn’t in front of you — how MT4/MT5 monitoring works.