Margin Calls & Stop Out Levels
A margin call occurs when your account equity falls to the minimum level required to maintain open positions. If your margin level continues to decline, positions may be closed automatically when the stop out level is reached.
What is a margin call?
A margin call is a warning that your account is running out of collateral to maintain open positions.
At TIOmarkets, the margin call level is 100%. This means that if your equity falls to 100% of your used margin, open positions are at risk of being automatically closed by the trading platform.
Your margin level is calculated as follows:
Margin Level = Equity / Used Margin × 100
Where:
- ✓Equity is your account balance plus or minus any unrealised profit or loss.
- ✓Used margin is the amount required to maintain your open positions.
- ✓Free margin is the remaining equity available to open new trades or absorb adverse market movements.
When your margin level falls, it usually means that open trades have moved against you, reducing your account equity.
TIOmarkets margin call and stop out levels
TIOmarkets applies the following margin levels across its main trading accounts
For accounts using 1:2000 leverage, the margin stop out level is 40%.
What happens at the 100% margin call level?
When your margin level reaches 100%, your account is at margin call level.
This means your equity is equal to the margin required to maintain your open trades. At this stage, you should take action because your account has limited room to absorb further adverse market movement.
You may need to:
- ✓deposit additional funds
- ✓close some open positions
- ✓reduce your trade size
- ✓monitor your account closely
A margin call should be treated as a serious warning. It does not mean your trades will automatically close yet, but it does mean your account is running out of collateral to maintain open positions.
What happens at the stop out level?
If your margin level continues to fall and reaches the stop out level, the trading platform will begin closing open positions automatically.
For most TIOmarkets accounts, this happens at the 30% margin level. For accounts on 1:2000 leverage, the stop out level is 40%.
This process is designed to reduce further losses and prevent the account from falling further below the required margin level. However, it does not guarantee that losses will be limited to a specific amount, especially during fast-moving or illiquid market conditions.
Margin call example
Let’s say you have $1,000 equity in your trading account and your open trades require $500 used margin.
Your margin level would be:
$1,000 / $500 × 100 = 200%
At this point, your account is above the margin call level.
Now imagine the market moves against your open positions and your equity falls to $500, while your used margin remains $500.
Your margin level would now be:
$500 / $500 × 100 = 100%
This is the margin call level at TIOmarkets.
If the market continues to move against you and your equity falls to $150, while used margin remains $500, your margin level would be:
$150 / $500 × 100 = 30%
For most TIOmarkets accounts, this is the stop out level. At this point, open positions may start being closed automatically.
Why margin calls happen
Trading on margin increases market exposure with a smaller deposit, but it also increases both potential profits and potential losses. Margin calls usually happen when there is not enough equity in your account to support your open trades.
Common reasons include:
- ✓using high leverage
- ✓opening trades that are too large for your account size
- ✓holding multiple positions at the same time
- ✓sharp market movement
- ✓trading during volatile news events
- ✓not using stop loss orders
- ✓allowing losing trades to run for too long
The higher your leverage, the less margin you may need to open a position, but the faster your margin level can change when the market moves.
How to reduce the risk of a margin call
You cannot remove trading risk completely, but you can manage it more carefully.
Use suitable trade sizes
Avoid using position sizes that leave very little free margin. Smaller trade sizes give your account more room to absorb adverse market movements.
Monitor your margin level
Check your margin level regularly on the trading platform. Do not wait until your account reaches a margin call level before managing risk.
Use stop loss orders
A stop loss can help define your risk before entering a trade. However, stop losses are not guaranteed and may be affected by slippage during volatile or fast-moving markets.
Maintain enough free margin
Leaving extra free margin gives your account a buffer if the market moves against your positions.
Avoid overexposing your account
Holding too many open trades at once can increase your used margin and reduce your ability to handle adverse market movement.
How to respond to a margin call
If your account reaches margin call level, you can consider the following actions:
Add funds to your account
Depositing more funds can increase your equity and improve your margin level. This may give your open positions more room, but it also means committing more capital to a risky situation.
Close some open positions
Closing one or more trades can reduce your used margin and may help restore your margin level.
Reduce your exposure
You may choose to partially close positions or avoid opening new trades until your margin level improves.
Review your risk
A margin call is a sign that your account may be overexposed. Review your trade size, leverage, open positions and risk management approach.
Important note about fast-moving markets
Markets can move quickly, especially during major news events, low liquidity periods or sharp price movements.
This means your margin level can fall rapidly. In some cases, positions may be stopped out before you have time to add funds or close trades manually.
You are responsible for monitoring your account and maintaining enough margin to support your open positions.
Related information
FAQs
What is the margin call level at TIOmarkets?
The margin call level at TIOmarkets is 100% across Nano, Standard, Raw and VIP Black accounts.
What is the stop out level at TIOmarkets?
The margin stop out level is 30% of your account equity. For accounts using 1:2000 leverage, the margin stop out level is 40%.
Does a margin call mean my trades will close immediately?
A margin call means your account has reached a warning level. If your account equity continues to fall and reaches the margin stop out level, the trading platform will start closing open positions automatically.
How can I avoid a margin call?
You can reduce the risk of a margin call by using smaller trade sizes, avoiding excessive leverage, maintaining enough free margin, using stop loss orders, and monitoring your margin level regularly.
Is trading with high leverage risky?
Yes. Higher leverage allows greater market exposure with less margin, but it also means smaller price movements can have a larger impact on your account equity. Leverage amplifies profits and losses equally.