What happens if you ignore a margin call?

If equity keeps falling and you do not add funds or reduce positions, the broker can close positions automatically at the stop-out level, usually starting with the largest losing one.

What is the difference between a margin call and a stop-out?

A margin call is a warning threshold; a stop-out is the lower level at which positions are actually closed. Some platforms and crypto exchanges go straight to liquidation.

How do you avoid a margin call?

Size positions from a stop-loss and a fixed risk per trade, keep effective leverage low, and leave plenty of free margin rather than relying on the maximum leverage available.

What Is a Margin Call? Meaning, Example and How to Avoid It

A margin call is triggered when open losses shrink account equity relative to the margin used by open positions. The broker either asks for more funds or warns that positions will be closed. In crypto derivatives the equivalent is usually called liquidation, and it can happen automatically without any prior call.

How it works

Brokers watch the margin level = equity ÷ used margin × 100. Two thresholds matter:

Margin-call level: a warning; new positions may be blocked.
Stop-out level: positions are closed automatically, typically the biggest loser first, until the margin level recovers.

The exact percentages differ by broker, product and regulation. Fast markets and gaps can push the closing price beyond the stop-out level, which is a form of slippage.

Example

An account holds $3,000. The trader opens a position worth $60,000, so effective leverage is 20:1 and used margin at a 5% requirement is $3,000. Margin level starts at 100%.

Assume the broker calls at 100% and stops out at 50%. Any open loss now triggers the call. A 2.5% move against the position costs $1,500, equity drops to $1,500 and margin level reaches 50%: the position is closed with half the account gone.

Had the same trader risked 1% of the account ($30) with a stop-loss 1.5% away, the position would have been about $2,000, using roughly $100 of margin. A 2.5% adverse move would never have been reached; the stop would have closed the trade first.

Common mistakes

Using the stop-out as a stop-loss. Letting the broker close the trade means the loss is set by margin rules, not by your analysis.
Sizing by leverage, not by risk. Use the position size calculator to set size from the stop distance.
Adding funds to save a losing trade. Meeting a call keeps the position alive but often deepens the drawdown.
Ignoring weekend or news gaps. Price can jump past the stop-out level, so the actual loss may exceed what the thresholds suggest.

In SnapPulse

SnapPulse calculates position size on the device from balance × risk % ÷ stop distance, alongside the stop and target from each scan. Download SnapPulse.

Educational content — not financial advice.

Updated October 10, 2026