When does a margin call and stop out occur?
For the MT4/5 platforms a margin call occurs when equity on the account falls below 90% of the margin required for maintaining your positions and an automatic stop out will occur when account equity falls below 50% of the margin required for the trades.
This percentage is constantly calculated and updated on your platform and is called 'margin level'. If your equity (balance plus/minus open profit/loss) falls below 50% of the margin required to maintain the open position(s) they will be automatically closed. This is calculated as follows:
Margin level (equity / margin) = < 90% (margin call warning)
Margin level (equity / margin) = < 50% (stop out)
On cTrader, the margin call settings can be adjusted to your preferred margin level but are set by default at 500%, 100% and 80%. Smart stop-outs occur when equity falls below 50% of the margin required for open trades on the account.
Margin level (equity / margin) = < 50% (cTrader stop out)