Learn more about margin call in XTB.
- A Margin Call, also known as a margin stop, is a protective measure that helps traders to manage their risk and prevent additional losses. It is a notification from your broker that you are in danger of the possibility of having some or all of your positions forcibly closed, or liquidated.
- The limit level is calculated by dividing your equity by the required margin and multiplying by 100%.
- Margin calls happen when the percentage of the equity in the account drops below the maintenance margin requirement.
- At XTB, a margin call occurs when your margin level falls below 100%.
- A Stop Out is the act of closing, or liquidating, your positions.
- At XTB, a stop out occurs when your margin level falls below 30%.
- Once a stop out occurs, your open position with the biggest loss will be automatically closed until your margin level returns back above 30% to protect your account from suffering further losses. This is how XTB helps you to manage your risk.
- To avoid being closed out of your position by a stop out, you’ll need to ensure your margin level remains above 30% by depositing more funds.
Limiting losses is one of the most important aspects of trading and many traders choose to use stop loss orders as a protective measure. On the other hand, some traders decide to manage their risk manually by monitoring their open transactions.
Your margin level is the deposit required to maintain each open trade on your account. To open and maintain your trade, you must have sufficient trading resources to cover the margin requirement at all time.
Free margin represents the amount of capital you have remaining to place new trades or cover any negative price moves in your open trades.
The margin stop is a protective measure, particularly for traders who do not use stop loss orders. When the margin level falls below 50%, your open position with the biggest loss will be automatically closed as an in-built safety mechanism.
![Margin Call]()
Source: xStation
In the example above, a 5 lot position has been opened and the margin level is currently over 2000%. If the margin level falls to under 30%, then system will automatically close out the trade to prevent further losses.
