A stop out is the automatic closure of open positions when the margin level falls to the stop-out level. At NextTrade, it occurs at a margin level of 50%: positions are closed starting with the one with the largest loss until the margin level is back above that level. In fast markets, a stop out may not prevent larger losses.
Also called: stop-out, stop out level, forced liquidation
Hypothetical example
Hypothetically, open positions use $500 of margin. When losses bring your equity down to $250, the margin level is 50% and the position with the largest loss is closed automatically, at the next available price.
