Stop Out

A stop-out is the broker's emergency safety mechanism. When your margin level falls below a specific threshold (usually 50%-100%, depending on the broker), the broker starts closing your positions automatically — biggest loser first — until your margin level returns above the safe threshold. Stop-outs are not the same as margin calls. A margin call is a WARNING ("add funds or we'll close your positions"). A stop-out is the action — the broker just liquidates without asking. Most modern brokers skip the warning step and go straight to stop-out, because price moves so fast that a warning would arrive too late. Stop-outs always happen at the worst possible price. The broker uses market orders to close, which means slippage. During fast markets, a stop-out can leave your account in deeply negative territory before the close completes.