Stop-out is the automatic position-closing triggered when your margin level falls below a broker-specified threshold. Typical stop-out levels are 50% for standard retail accounts and 20% for pro or offshore accounts. Once hit, the platform closes your most-losing position first, then continues closing positions in order until your margin level recovers above the threshold.
Stop-outs protect the broker from negative account balances — without them, a fast-moving market can leave a retail client owing money. In most regulated jurisdictions, negative balance protection is mandatory for retail clients, so even if the market gaps past the stop-out you are not liable for the shortfall.