Margin close-out 50% is a fixed threshold set by ESMA for retail client CFD accounts in the European Union: when the funds in the account, plus unrealized profits, fall below half of the initial margin required for open positions, the broker must close one or more positions. This precise threshold does not exist under the American NFA framework, which imposes a result-based duty with no single percentage mandated by the text itself.
Many traders assume a universal percentage governs the forced closure of leveraged accounts, regardless of broker or jurisdiction. That is not the case: two primary regulatory frameworks treat the matter differently, and confusing a margin call with a protective close-out leads to mistaken expectations.
ESMA’s fixed threshold for retail CFDs
ESMA’s decision defines margin close-out protection as the closure of one or more open retail client CFD positions, on the most favorable terms for the client, when the sum of funds in the account and unrealized profits falls below half of the total initial margin required for those positions. The text therefore sets a single fixed threshold: 50% of the initial margin, applicable to all CFD providers serving retail clients within the scope of the decision.
This threshold did not appear by chance. Before ESMA’s product intervention, trigger levels varied widely from one broker to another: some national authorities reported practices ranging from 0% to 30% of the required initial margin, which made the risk of loss to the client hard to anticipate from one provider to another.
The NFA’s result-based duty for US forex brokers
On the other side of the Atlantic, the NFA rule applicable to Forex Dealer Members sets no trigger percentage. The text imposes a result-based duty: the broker must either collect an additional security deposit from the client or liquidate their positions, if the deposit maintained no longer suffices to cover the requirements of the rule. No single fixed threshold frames this tipping point between the two options.
The same NFA rule does, however, set a fixed floor for the initial security deposit itself, distinct from the close-out threshold: 2% of notional value for the major listed currencies (British pound, Swiss franc, Canadian dollar, Japanese yen, euro, Australian dollar, New Zealand dollar, Swedish krona, Norwegian krone, Danish krone), and 5% for other transactions. This floor protects the opening of the position; it says nothing about the level at which it will be closed if the deposit later becomes insufficient.
| Framework | Nature of the rule | Threshold or duty | Reference date |
|---|---|---|---|
| ESMA (CFDs, EU) | Single fixed threshold | 50% of total initial margin | Decision 2019/155, January 23, 2019 |
| NFA (forex, United States) | Result-based duty | Cover or liquidate, no fixed percentage | Section 12 of the Financial Requirements |
| NFA (initial deposit) | Fixed floor | 2% major currencies, 5% other transactions | Section 12 of the Financial Requirements |
Why a margin call is not the same as a protective close-out
These two notions are often confused. A margin call is a contractual warning sent by the broker when the client’s margin level approaches a threshold defined in that broker’s own terms and conditions, not in a fixed regulatory text. The protective close-out, by contrast, is the actual act of closing positions, and it is this that ESMA frames through the 50% threshold for retail CFDs. A trader following market news, for example during a volatile session like the one described in the November 6, 2026 briefing on Wall Street’s worst session of the year, may see their account receive a margin call well before reaching the regulatory close-out threshold, depending on that broker’s own policy.
A trader who uses a stop order to limit risk before even approaching these thresholds can read our explanation of the stop-limit order and what it does or does not guarantee at execution, or of the trailing stop loss and what it never guarantees about the final price obtained.
What this article cannot claim
Neither of the two primary sources cited allows one to claim that any specific broker applies exactly 50% today, nor that all US forex brokers set the same coverage or liquidation threshold among themselves. The NFA rule imposes a result, not a figure common to all Forex Dealer Members. Likewise, neither source documents the minute-by-minute mechanics of an actual close-out on a given account: they describe the regulatory framework, not an individual case.
Frequently asked questions
Does the 50% threshold apply to every broker worldwide?
No. This fixed threshold comes from ESMA’s decision and targets CFD providers serving retail clients within the scope of that decision. The American NFA rule for forex brokers does not impose this same percentage.
Does a margin call mean my account will be closed at 50% of the initial margin?
Not necessarily. The margin call is a contractual warning whose threshold depends on the broker, while the ESMA protective close-out is triggered precisely at half of the total initial margin for the retail CFDs concerned.
Why did closure practices vary so much before ESMA’s intervention?
Some national authorities found trigger levels ranging from 0% to 30% of the required initial margin depending on the provider, which prompted ESMA to set a single fixed threshold applicable to all.
Does the NFA rule set a figure anywhere in this area?
Yes, but not for the close-out itself: it sets a fixed floor for the initial security deposit, at 2% of notional value for the listed major currencies and 5% for other transactions.