Margin Level
Margin level is equity divided by used margin, and the number brokers use to decide when to margin-call or stop you out.
Margin level is equity divided by used margin, and the figure brokers watch for margin calls and stop-outs. Below the broker's stop-out threshold, positions close automatically.
Margin level is the ratio of your account equity to the margin currently used by open positions, expressed as a percentage. It is the metric brokers watch: when margin level falls below the stop-out threshold, usually 50-100% depending on the broker, open positions are closed automatically, often the weakest first. Managing margin level means keeping free margin for open positions, not just equity above zero.
How It Works
- Margin level = equity / used margin x 100%
- Falling with losses on open positions
- Stop-out closes positions, usually the largest first
Trading Tips
Know your broker's stop-out level before you need it
Free margin is your buffer: using 90% of margin is a stop-out waiting to happen
A margin call in fast markets can close positions far worse than your plan
Related Terms
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