Definition, Meaning & Synonyms
stop-out
noun
/ˈstɒp aʊt/
Definition
A stop-out refers to a situation in trading where a broker automatically closes out a trader’s position, usually due to insufficient margin or adverse price movements.
Examples
- During a period of high volatility, many traders faced a stop-out due to rapid price declines.
- He was unhappy with the stop-out that occurred after his account balance dropped too low.
Meaning
The term is primarily used in financial trading to indicate that a trader has lost enough money that their account balance falls below the required margin, prompting the broker to intervene and prevent further losses.
Synonyms
- liquidation
- margin call
