# How does Smart Stop Out in cTrader works?

There are two types of Stop Out in cTrader platform, Fair Stop Out and Smart Stop Out.

Fair Stop Out logic is similar to Stop Out in MetaTrader 4/5 platforms.

When reaching it, the platform starts closing the positions with the biggest Margin in order to restore the Margin Level for other open positions.

Smart Stop Out logic only closes a part of the position with the biggest Margin in order to always keep the Margin Level a bit above the current Stop Out level.

## Example how the Smart Stop Out works in cTrader

Please note that the example doesn’t take into account spreads and (or) brokers’ commissions.

We are given:

Account balance: 500 USD.
Account equity: 500 USD.
Leverage: 1:500.
Smart Stop Out: 50%.
Margin Level: 100%.
Open position No.1: Buy 200,000 USDJPY.
Open position No. 2: Buy 50,000 USDJPY.

Once the price of USDJPY falls by more than 10 pips, the Margin Level will become less than 50% and trigger the Smart Stop Out feature.

Calculations:

Pip value for 250,000 USDJPY: 2,500 JPY (24.67 USD).
Loss in pips: 10.2.
Unrealized profit/loss: 24.67 USD * 10.2 = 251.63 USD.
Equity: 500.00 USD – 251.63 USD = 248.37 USD.
Margin Level: 248.37 USD / 500.00 USD * 100% = 49.7%.

As we can see in the example, the account Margin Level fell below Smart Stop Out. In this case, cTrader platform will partially close the largest position (Position No 1), in order to free the required Margin amount.

The position of 200,000 USDJPY will be modified into 198,000 USDJPY by selling 2,000 USDJPY.

Calculations:

Pip value for 2,000 USDJPY: 0.1973 USD.
Loss in pips: 10.2.
Loss amount: 0.1973 USD * 10.2 = 2.01 USD.
Unrealized loss/profit: 251.63 USD – 2.01 USD = 249.62 USD.
Margin used for 248,000 USDJPY: 496.00 USD.

Due to the loss, the account Balance and Equity will change in the following way:

Balance: 500.00 USD – 2.01 USD = 497.99 USD.
Equity: 497.99 USD – 249.62 USD = 248.37 USD.
Margin Level: 248.37 USD / 496.00 USD * 100% = 50.1%.

As a result of Smart Stop Out, the Margin Level went up to 50.1% with the minimum effect on the total balance of the trading account.