Margin Call and Stop out

Margin Call is the possible outcome of trading when the opened positions start approaching levels that require maintenance. Clients should constantly monitor their trading activity and react promptly by either closing a losing position or topping up their balance.  

In ECN trading the Margin Call occurs when the Margin Level falls below 100%, where Margin Level stands for Equity-to-Margin ratio. It means that as soon as the Equity (balance +/- profit/loss) falls below the margin requirement, a client is recommended to equalise the margin used to open a position with the equity of the trading account.    

Stop out is the possible outcome of trading when the broker closes a client’s losing position because of the insufficient Margin requirement on their trading account (critical situation). This option is triggered automatically when the Margin Level falls below 50%. It means that as soon as the Equity falls below 50% of the Margin used to open a position, it is closed by the broker to prevent a client from going into debt.

In conclusion, Margin Call and Stop out options are characteristics of the customer-oriented approach in ECN trading. They allow a certain level of security without constantly monitoring Margin Level indicators and reflects a good example of broker-to-client cooperation.