Stop-out

Lesson 3 of 4 · about 7 minutes

3 questions, each checked the moment you answer it.

5 steps · about 7 minutes

The interactive lesson walks these ideas one screen at a time and checks your answers as you go. The text below covers the same ground for reading.

The margin call comes at 100%, the stop out at 50%

Margin level is equity divided by used margin, as a percentage. Watch what happens to a position using US$400 of margin as equity falls and the used margin stays exactly where it is.

Larger positions reach stop-out sooner

Same US$1,000 account, same 1:500 example, and only the position size changes. The stop-out level stays at 50% throughout.

Previous lesson: Balance, equity and margin level

Next lesson: Position size from a monetary risk