Yes, it is possible, for example, in the case of a gap (when there are news releases, after the weekend (the difference between the closing price at the end of the current week and the opening price at the beginning of next week).

To prevent a situation that leads to a negative balance, the company provides a margin call – a message from a broker informing the investor of the need to add additional funds to guarantee the security of open orders.

If after a margin call the investor added no additional funds into his trading account and the losses continue to grow, then when a certain margin level is reached, stop out will be triggered and a certain number of orders (or possibly all open orders of the trading account) will be closed automatically.

This occurs when the ratio of funds to the margin becomes equal to the company’s Stop Out level.

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