If your open positions were automatically closed without you manually closing them, this may have been caused by Stop-Out. Stop-Out occurs when your trading account's margin level reaches 20%, triggering the automatic closure of open positions to reduce the risk of further losses when there is insufficient margin to maintain them.
How is a stop-out triggered?
A Stop-Out is triggered when your trading account's margin level falls to or below 20%.
Your margin level is calculated using the following formula:
Margin Level = (Equity ÷ Used Margin) × 100%
Where:
- Equity: Your trading account balance plus floating profit or loss.
- Used Margin: The margin required to maintain your open positions.
Assume your trading account has:
Item | Amount |
|---|---|
Equity | $190 |
Used Margin | $1,000 |
Margin Level | 19% |
Margin Level = ($190 ÷ $1,000) × 100% = 19%
In this example, your margin level has fallen below the 20% Stop-Out level, and the system may begin automatically closing your open positions to reduce margin usage.
What is the difference between a margin call and a stop-out?
Ultima Markets applies the following margin levels:
Margin Level | What Happens? |
|---|---|
50% – Margin Call | A warning level indicating that your available margin is running low. Positions are not automatically closed at this level. |
20% – Stop-Out | The system automatically closes open positions to reduce margin usage. |
A Margin Call occurs before a Stop-Out, giving you an opportunity to review your trading account's margin situation.
What happens to my open positions during a stop-out?
- Automatic closure: The system begins closing open positions, starting with the position carrying the largest floating loss.
- Market execution: Positions are closed at the available market price, which may differ from the price when the Stop-Out was triggered.
- Margin recalculation: After each position is closed, your margin level is recalculated.
- Remaining positions: The process continues until your margin level rises above 20% or all open positions have been closed.
A Stop-Out does not necessarily mean that all your open positions will be closed.
The execution sequence and closure process are subject to the applicable trading platform and margin management rules. During volatile market conditions, positions may be closed at prices that differ from those prevailing when the Stop-Out threshold was reached.
