Margin call and stop out
What you learn in 3 minutesThis lesson explains the two account levels a broker watches: the margin call, where you are warned, and the stop out, where positions are closed for you. With USD/INR near 83.2500 and one pip worth ₹10 on one standard lot, you will see how a small price move can turn a comfortable balance into a forced exit.
From ₹50,000 to stop out at 50%
| Step | Amount | Note |
|---|---|---|
| Account balance | ₹50,000 | Cash you deposited using UPI or bank transfer. |
| Position opened | 1 standard lot USD/INR at 83.2500 | One standard lot is 100,000 units. |
| Margin blocked at 100% level | ₹50,000 | Broker sets margin equal to balance, so margin level is 100%. |
| Margin call level | 100% | Equity equals used margin. You are warned, not closed. |
| Stop out level | 50% | Equity falls to half the used margin. Broker closes positions. |
| Equity at stop out | ₹25,000 | 50% of ₹50,000 used margin. |
| Loss allowed before stop out | ₹25,000 | ₹50,000 balance minus ₹25,000 equity. |
| Pips that cause that loss | 2,500 pips | ₹25,000 divided by ₹10 per pip. |
| Price move on USD/INR | 83.2500 to 85.7500 | 2,500 pips against the position. |
| What the broker closes first | The position with the largest loss | Brokers usually close the biggest loser first to restore margin level. |
Brokers may round pip values, add commission or swap charges, and quote different margin call and stop out levels. Check your own platform.
The mistake people make here
Many people treat the margin call as a warning they can ignore, hoping the price will turn. They add money or open another position, which uses more margin and brings the stop out closer. Instead, when equity reaches the margin call level, reduce position size or close the trade yourself. That way you choose the exit price, not the broker.Check yourself
You have ₹40,000 balance and use ₹20,000 margin. At what equity does a 50% stop out trigger?
50% of ₹20,000 is ₹10,000. Stop out triggers when equity falls to ₹10,000.
With ₹10,000 equity at stop out and ₹10 per pip, how many pips of loss does that represent from the ₹40,000 start?
Loss is ₹40,000 minus ₹10,000 = ₹30,000. ₹30,000 divided by ₹10 per pip = 3,000 pips.