Stop out level: a 5-step calculation of where positions close
The Nuqta Markets team · 28 October 2026 · 7 min read · How we write
In short
- At stop out, equity = stop out % × used margin; everything above it is the loss the account can take.
- Divide that loss by the pip value to get the distance in pips.
- A planned stop loss should sit far inside the stop out price, never near it.
A stop out is the moment the broker closes positions for you because the margin level has fallen to its limit. It is not a guess: the price where it happens can be worked out before the trade is opened, in five steps. Doing that once changes how most people look at leverage and lot size.
The five steps
Example: a $1,000 account buys 0.30 lot of EURUSD at 1.1000 with 1:100 leverage. The broker's stop out level in this example is 50%.
- Used margin. 30,000 euros × 1.1000 ÷ 100 = $330.
- Equity at stop out. 50% × $330 = $165.
- Loss the account can absorb. $1,000 − $165 = $835.
- Distance in pips. 0.30 lot on EURUSD is $3 a pip, so $835 ÷ $3 ≈ 278 pips.
- Stop out price. For a buy, 1.1000 − 0.0278 ≈ 1.0722 on the bid. For a sell it would be above the entry, on the ask.
Illustrative calculation, not an expectation of results.
Two fine print points. The spread is already inside the 278 pips, because equity is valued at the closing side of the quote. And on EURUSD in a dollar account the margin itself shrinks slightly as the price falls, so the real level lands a pip or two further away. The steps give the right order of magnitude, which is what matters for planning.
Leverage moves it less than you think
| Lot | Leverage | Used margin | Pip value | Pips to a 50% stop out |
|---|---|---|---|---|
| 0.30 | 1:100 | $330 | $3 | about 278 |
| 0.30 | 1:500 | $66 | $3 | about 322 |
| 1.00 | 1:500 | $220 | $10 | 89 |
| 0.30 | 1:30 | $1,100 | $3 | cannot open: margin above equity |
Illustrative calculation, not an expectation of results.
Going from 1:100 to 1:500 on the same 0.30 lot adds only about 44 pips of room. What changes the picture is the lot: the higher leverage makes 1.00 lot possible on $1,000, and that trade is stopped out after 89 pips. Leverage mostly decides how big a position can be opened; the position decides how fast the account reaches the stop out. The ratios are laid out in leverage ratios in numbers.
Where regulation sets the level
Stop out levels are set by each broker, often somewhere between 20% and 50% on offshore accounts. Under the retail rules of ESMA in the EU and the FCA in the UK, positions must be closed once equity falls to 50% of the required margin, and retail clients there are protected from a negative balance. In a fast gap the fill can still be worse than the calculated price, which is why the level is a boundary, not a plan.
Stop out vs a planned stop
On the 0.30-lot trade above, a 25-pip stop loss risks $75, or 7.5% of the account, long before the stop out at 278 pips. The lot size calculator turns that around: start from the risk you want (for example 1%, $10) and a 25-pip stop gives 0.04 lot. At that size the stop out is so far away it becomes irrelevant. Check the stop's distance in money with the pip value calculator before the trade, not after.
In short
Equity at stop out = level × margin; the rest is the loss available; divide by pip value for the distance. If the planned stop is anywhere near that price, the size is too big for the account. Margin level itself is explained in what is margin level, and the other checks a size should pass are in the position sizing checklist.
Questions people also ask
What is the difference between a stop loss and a stop out?
A stop loss is an order the trader places at a chosen price. A stop out is the broker closing positions automatically because margin level fell to its limit. One is part of a plan; the other means the plan was missing.
Which trade is closed first at stop out?
Many brokers close the position with the largest loss first, then recheck the margin level. The exact order is set in the broker's terms, so it is worth reading them.
Can a stop out leave a negative balance?
In a fast gap the closing price can be worse than the stop out level. Retail clients in the EU and UK have negative balance protection by regulation; elsewhere it depends on the broker's terms.
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