What is a Broker Stop Out?

A Broker Stop Out (also called a Margin Stop Out) is when a broker forcibly closes one or more of a  traders open positions as a result of the trader's margin level falling below a certain broker-specified level.

Before a margin stop out occurs, VEMA will attempt to warn traders with an email informing them their margin level is getting low and may need attention. 

Brokers will typically do something similar with a margin call.

VEMA also has several warnings when setting up trades if the position opening at current margin level would put an account at risk of a margin call and subsequently a broker stop out.

The Margin Stop out is designed to protect both the trader and the broker from potential losses that could exceed the trader's account balance.