Margin, Free Margin and Stop-Out Levels are important concepts that help traders understand how much of their account balance is being used to support open positions.

What is Margin?

Margin is the amount of funds required to open and maintain a trading position. The margin requirement depends on several factors, including the instrument being traded, position size and the leverage applied to your account.

For example, higher leverage generally results in lower margin requirements, while larger positions require more margin.

What is Free Margin?

Free Margin is the amount of available funds in your trading account that can be used to open new positions or support existing trades.

It is calculated as:

Free Margin = Equity - Used Margin

As your open positions move in profit or loss, your free margin will increase or decrease accordingly.

What is the Stop-Out Level?

Kudo applies a 50% Stop-Out Level as per our company terms and conditions.

If your account's margin level falls to 50% or below, MetaTrader 5 (MT5) may begin automatically closing open positions, starting with the position generating the largest floating loss. This helps protect the account from reaching a negative balance and reduces the risk of further losses.

Understanding margin and risk management is essential when trading leveraged products. Traders should monitor their margin levels carefully, especially during periods of increased market volatility.