How do margin, leverage, margin calls, and stop-outs work?

Margin is the deposit required to open and maintain a leveraged CFD position, while leverage expresses how large a position that margin controls. Free margin is the equity not tied up in open positions, and margin level is equity divided by used margin, shown as a percentage. If losses push the margin level below the broker’s threshold, a margin call warns the trader, and a further fall can trigger a stop-out where positions are closed automatically. Leverage magnifies both gains and losses.