When trading with leverage, it’s crucial to understand how a stop-out works and why it matters. A stop-out is a risk management mechanism that protects your account from falling into a negative balance. It happens automatically when your margin level becomes too low to sustain your open positions.
At Bullwaves, the stop-out level is set at 20% across all trading platforms. This means that when your margin level drops to or below 20% of the required margin, the system will start closing your open positions automatically—beginning with the one currently showing the largest loss.
This automated process is designed to protect your remaining equity and minimize further risk. It’s important to actively monitor your margin level, especially during volatile market conditions.
You can calculate your margin level using the following formula:
Margin Level = (Equity / Used Margin) × 100
For example, if your account equity is $500 and your used margin is $2,000, your margin level would be:
(500 / 2000) × 100 = 25%
Since this is above the 20% threshold, your trades would remain open. However, if it drops to 20% or lower, the stop-out will be triggered.
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Bullwaves is a trading name of Equitex Capital Limited (Registration No. 8434948-1), a company authorized and regulated by the Financial Services Authority (the "FSA", licence no. SD185) with legal registered address in CT House, office number 9A, Providence, Mahe, Seychelles and physical address in Office No. Al9C, Providence Complex, Providence, Mahe, Seychelles.
ETX Services Limited with company registration number HE455407, a company registered in Cyprus with registered address Archiepiskopou Makariou lll 160, 3026 Limassol is appointed as Independent Representative and Distributor.
ETX Services Ltd is not the Licensed Entity in the EU but only acts as the Service entity for Equitex Capital Ltd.
Risk Disclaimer:
Over-the-counter derivatives are complex instruments and come with a high risk of losing your initial capital rapidly due to leverage. You should consider whether you understand how over-the-counter derivatives work and whether you can afford to take the high level of risk to your capital. Investing in over-the-counter derivatives carries significant risks and is not suitable for all investors.
When acquiring our derivative products you have no entitlement, right or obligation to the underlying financial asset. Equitex is not a financial advisor and all services are provided on an execution only basis. Information is of a general nature only and does not consider your financial objectives, needs or personal circumstances. Important legal documents in relation to our products and services are available on our website. You should read and understand these documents before applying for any Bullwaves products or services and obtain independent professional advice as necessary.
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For complaints please email us at compliance@bullwaves.com