CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% (Trading 212 Markets Ltd; FXFlat Bank GmbH; Trading 212 Ltd.) & 72% (Trading 212 UK Ltd.) of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
If your account does not have enough funds to maintain the minimum required margin, your open positions will be automatically closed. This safeguard is designed to protect your account from going into a negative balance, ensuring you do not accumulate losses beyond your available funds.
When a ‘stop-out’ occurs due to your margin dropping too low, we will first attempt to partially close the position selected by your chosen strategy. If closing only a part of the position is enough to restore your margin level, we will do so. If a partial closure is insufficient, the entire position will be closed.
Additionally, to provide a protective buffer and help prevent multiple liquidation events quickly, the process aims to restore your margin level to slightly above the required threshold. We add a 5% margin buffer, meaning the liquidation will aim to restore your margin level to approximately 30%. Please refer to the following article for an explanation of how the margin is calculated.
This mechanism is a legal requirement for retail CFD accounts, designed to protect your account from going into a negative balance, ensuring you do not accumulate losses beyond your available funds.
To prevent stop-outs on your account, you can deposit additional funds or close positions yourself to maintain the required margin level.