What is Indices Stop Out Indices Trading?

What Happens When Your Free Indices Trading Margin Runs Out?

A indices stop out is when a indices trader's account free indices margin goes below the required indices margin level that is set by the indices broker. This means that because the free indices margin in the indices trader's account has gone below the required indices margin level then the trader gets a indices stop out and some of the open trades in the indices trader's are closed by the indices broker until this indices margin level goes back up to above the required indices margin level.

Some of the open trades may be closed or all of the open trades may be closed if this indices stop out is automatically executed by the indices broker.

What is Indices Trading Margin Requirement Level?

Now if Your Indices Leverage is 100:1

When trading if you have $1,000 and use leverage of 100:1 and buy a indices trade - your indices margin on this indices trade transaction is the $1000 dollars in your indices account, this is the money that you will lose is your open indices trade transaction goes against you the other $99,000 that is borrowed, the indices broker will close the open transactions automatically using a Indices Stop Out once your $1,000 has been taken by the stock indexes trading market.

But this is if your indices broker has set 0% Indices Trading Margin Requirement before closing your stock indexes trades automatically using this Indices Stop Out.

What is 20% Indices Trading Margin Requirement Level?

For 20% indices margin requirement before closing your stock indexes trades automatically using a Indices Stop Out, then your indices trade transactions will be closed once your balance gets to $200 - at $200 you will get a indices stop out.

What is 50% Indices Trading Margin Requirement Level?

For 50% requirement of this level before closing your stock indexes trades automatically using a indices stop out, then your transactions will be closed once your balance gets to $500 - at $500 you will get a indices stop out.

What is 100% Indices Trading Margin Requirement Level?

If the broker sets 100% indices margin requirement of this level before closing your open positions automatically using a Indices Stop Out - at $1,000 you will get a indices stop out, then your stock indexes trades will be closed once your balance gets to $1,000: Meaning the stock indexes trades will close out as soon as you execute a 1 standard stock indices lot on this stock indexes trading account because even if you pay 1 point spread your indices trading account balance will get to below $1,000 and the needed indices margin requirement percentage is 100% that is 1,000 dollars, therefore your indices orders will immediately get closed using a Indices Stop Out once your indices margin requirement falls below 100%.

Most indices brokers do not set 100% indices margin requirement, but there are those indices brokers that set 100% indices margin are not suitable for you at all, even those that set 50% indices margin requirement are still not suitable. Choose those set 20% indices margin requirements, in fact, those that set at 20% Indices Trading Margin Requirement are some of the best because the likely hood they close out your trade using a Indices Stop Out is reduced as shown in the examples above.

To Learn and Know More about Stock Indexes Leverage and Stock Indexes Margin - Read the Learn Indices Topics Below: