---
title: Margin Call, Stop Out and Negative Balance Protection
description: How margin call and stop out levels work, how brokers set them in MT5, what negative balance protection is and how these settings protect both clients and…
url: https://www.brokerwhitelabelsolution.com/blog-margin-call-stop-out-negative-balance-protection
language: en
publisher: Broker White Label Solutions
---

# Margin Call, Stop Out and Negative Balance Protection: A Guide for Brokers

By Broker White Label Solutions Team · Published 20 October 2026 · 7 min read

**Quick answer**

A margin call is a warning sent when a client's margin level (equity divided by used margin) falls to a set percentage, for example 100%. The stop out level is a lower percentage, for example 50%, at which the platform automatically starts closing positions to stop further losses. Negative balance protection ensures a client's account cannot go below zero, so clients cannot lose more than they deposited. Brokers configure these levels by client group in MT5, within the limits set by their regulator.

**Key takeaways**

- Margin level = equity / used margin x 100%.
- A margin call is a warning; a stop out automatically closes positions.
- Brokers set margin call and stop out levels per client group in MT5.
- Negative balance protection stops client accounts from going below zero.
- Regulators in many jurisdictions set minimum stop out levels and require negative balance protection for retail clients.

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Margin settings protect clients from losses larger than their deposit and protect the broker from unpaid negative balances. Getting them right is a core part of [broker risk management](https://www.brokerwhitelabelsolution.com/risk-management).

## How margin level works

**Margin level = equity ÷ used margin × 100%.** For example, a client with USD 1,000 equity and USD 500 used margin has a margin level of 200%. As losses reduce equity, the margin level falls.

## Margin call vs stop out

|  | Margin call | Stop out |
| --- | --- | --- |
| **What happens** | Warning to the client | Positions closed automatically, usually largest loss first |
| **Example level** | 100% | 50% |
| **Purpose** | Give the client time to add funds or reduce positions | Stop further losses |

The example levels are illustrations; your regulator may set minimums for retail clients.

## Negative balance protection

In fast markets, prices can gap past the stop out level and leave an account below zero. With **negative balance protection**, the broker resets the balance to zero, so the client never owes more than they deposited. Many regulators require it for retail clients, and it is a strong trust signal.

## How brokers configure these settings

- Margin call and stop out levels are set per client group in the [MT5](https://www.brokerwhitelabelsolution.com/mt5-white-label) manager.
- [Dynamic leverage](https://www.brokerwhitelabelsolution.com/dynamic-leverage) lowers leverage on large positions and around news and weekends, reducing gap risk.
- Negative balances can be reset automatically by a [plugin](https://www.brokerwhitelabelsolution.com/trading-plugins) or handled through the [CRM](https://www.brokerwhitelabelsolution.com/crm).

*General information only, not legal, financial or tax advice. Each client is responsible for its licences and the laws of every country where it operates.*

## Frequently asked questions

A warning sent when a client's margin level falls to a set percentage, telling them to add funds or reduce positions.

The margin level at which the platform automatically starts closing a client's positions to prevent further losses.

Margin level = equity divided by used margin, multiplied by 100%.

A policy that resets a client's account to zero if losses take it below zero, so clients cannot lose more than they deposited.

## Related services

### Risk Management

[Explore service](https://www.brokerwhitelabelsolution.com/risk-management)

### Dynamic Margin & Leverage

[Explore service](https://www.brokerwhitelabelsolution.com/dynamic-leverage)

### MT5 White Label

[Explore service](https://www.brokerwhitelabelsolution.com/mt5-white-label)

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Source: https://www.brokerwhitelabelsolution.com/blog-margin-call-stop-out-negative-balance-protection
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Broker White Label Solutions is a technology provider only. It does not provide brokerage, investment or payment services and does not hold client funds. General information, not legal, financial or tax advice.