When losing trades eat into your account, your broker watches one number: your margin level.
Margin call
When margin level drops to the broker's margin call level (often 100%), you get a warning and can't open new trades.
Stop out
If it keeps falling to the stop-out level (often 50% or lower), the broker automatically closes your biggest losing trades. You don't get a vote.
Equity $1,500, used margin $1,000 → margin level 150%. A loss drops equity to $1,000 → 100% (margin call). Another $500 loss → 50% → stop out.
A stop out isn't the broker being mean. It's the broker stopping you from owing more than you deposited. Still hurts though.
If you ever see a margin call, the problem happened earlier: the positions were too big. Proper position sizing means you should never get close.
- Watch margin level, not just balance.
- Margin call = warning; stop out = forced closing.
- Small positions keep you miles away from both.