can an unrealized loss result in a stop out ?

[radaway]

can an unrealized loss(ongoing) result in a stop out ?
(or is it only after the realisation)

Thx.

 

[radaway]

and one more thing:

Q2: can an unrealized loss > equity ?

or

unrealized loss > Margin ?

or

unrealized loss > Free Margin ?


Thx.

*stop out = 50 % in the above example

 

[Enivid]

can an unrealized loss(ongoing) result in a stop out ?

Yes. Actually only unrealized loss can lead to stop-out. Realized loss does affect margin, so cannot lead to a stop-out.

Q2: can an unrealized loss > equity ?

Yes.

unrealized loss > Margin ?

Yes.

unrealized loss > Free Margin ?

Yes.

 

[radaway]

Thanks Enivid
thus, if unrealized loss > Free Margin , then this is an automatic 'stop-out' . right ?

+++++++++++++++++++++++++++++++++++++++++++++++++++
My Broker mentions this on a 50 % stop out :


in normal lingo , can I be explained this with a simple example please. ?

 

[Enivid]

Margin Level = Equity/UsedMargin ratio.

Example:
You have $1,000 account, stop-out = 50%.
You open a trade using $200 margin.
Its unrealized (paper) loss reaches $900.
Now, your Equity = $100 while UsedMargin = $200. $100/$200 = 50% - stop-out triggered.

 

[radaway]

is 'used' margin = Margin or 'Free margin' ?
I am aware of the jargons :Margin & 'Free margin' , but not the 'used Margin'

Thx. for the clarification

 

[Enivid]

Yes, it is the same as Margin.

 

[radaway]

Thanks, let me close this issue here.