Margin
Margin is the capital the broker locks to keep a leveraged position open. Falling below required margin triggers margin call or stop-out.
When you open a leveraged trade the broker reserves a fraction of your equity as margin. At 1:100 leverage on a $10,000 EUR/USD position, the margin required is $100. The remaining account balance is free margin and absorbs floating losses. When free margin drops below a broker-defined threshold (often 50% margin level), you receive a margin call. If equity drops further the broker auto-closes positions at the stop-out level (often 20%–30%) to protect itself. Margin rules vary by broker, account type and instrument.
Worked example
On a $1,000 account at 1:500 leverage trading 0.5 lots EUR/USD, used margin is $100 (1%). If the trade drops $800, free margin runs out and the position auto-closes near the stop-out level.