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Margin Call vs Liquidation: What's the Difference and When Do They Trigger?

Many traders use these two terms as if they meant the same thing. Actually, they don’t and this confusion is behind the vast majority of misunderstandings when it comes to how trading platforms handle risk.

This article breaks down exactly how each mechanism works on Ouinex, so you always know where you stand.

Level 1: The Margin Call

Its a Warning, Not a Penalty

 

Picture the orange warning light on your dashboard. Your tank is low. The car doesn’t stop. You can still drive. But you can’t set off on a road trip without filling up first.

That’s exactly what a Margin Call is.

 

When your account equity drops below a defined threshold relative to the margin you’re using, the platform blocks the opening of new positions. Your existing positions keep running: they gain, they lose, they move normally. You can close them yourself at any time.

 

On Ouinex, the Margin Call threshold is set at 100% of used margin. This is not an ultimatum of “deposit funds or we close everything.”

 

It’s a safeguard that prevents you from increasing your exposure when your buffer is shrinking. The rule is documented, fixed, and applies to all accounts equally.

What you can do during a Margin Call:

  • Keep your open positions
  • Close manually whenever you choose
  • Watch your PnL move in real time

 

Level 2: Liquidation
An Automatic Protective Action

 

Now the red light. And the engine cuts out.

 

Automatic liquidation is triggered when your equity falls below 95% of your used margin. At that point, the platform closes your position at the best available price in the order book, within milliseconds.

This is a protective measure to all traders, and for the fairness of the system. Without it, one trader’s losses could cascade and affect other traders on the platform.

 

Why 95% and not 0%?

 

Because at 0%, it’s often too late: the closing order risks executing with slippage, and your account could go negative which means you’d owe money to the platform. Whereas the 95% threshold preserves a clean execution buffer to protect you from that outcome.

 

The Two-Tier Threshold: At a Glance

The table below shows how equity levels map to trading status on Ouinex. Refer to this whenever you’re unsure which zone you’re in.

 

 

Zone

Status

Normal Zone

Full trading access: open and close positions freely.

Margin Call (threshold varies by account)

New positions blocked. Existing positions remain open. You can still close manually.

Liquidation (95% of used margin)

Automatic closure triggered. Position closed at best available market price within milliseconds.

 

 TL;DR

  • Margin Call: New positions are automatically blocked. Your existing positions stay open and you remain in control.
  • Liquidation: Automatic closure when equity falls below 95% of used margin. This protects you from a negative balance. The 95% threshold is there to protect you.

 

Still confused about why your position was closed? Read our next article: I Still Had Funds Available So Why Was I Liquidated?

If you still have questions, our support team is here to help. Reaching out directly is the fastest way to get clarity and avoid any misunderstanding.

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