Developing stop out operating principles

We have formulated the principles of calculating the stop out level and the flow of applying stop outs to investors’ accounts. As blockchain technology is honored for its transparency, Scrinium stop outs will also be recorded uncovered, allowing users to trace their accuracy. Our team of technical experts is currently embedding this logic to ensure it is up and running on September.

This article is to ensure every participant is acquainted with the core functionality of Scrinium and can fully experience its transparency.

Scrinium stop outs explained

For Scrinium, stop out is a special service that executes stop-loss orders in its common trading sense, preventing balances to go negative. The stop out service closes the most profitable deal of the investor whose margin level has gone below 15%. That way, this deal’s floating profit is added to the free balance, decreasing margin and supporting margin level.

Margin level is a special percentage value showing the financial ability of an account to continue trading. The less it is, the lower the account’s potential to enter into new trades and keep other trades open.

In this equation, equity is a sum of your current balance and floating profit (the funds you get after closing all trades at that time).

Margin is an amount of security for keeping a particular trade open.

For currency pairs, it is calculated from the trade volume, size of the contract, and leverage applied.

For cryptocurrencies and indices, the formula is the same, but it also includes market price of the instrument and a special multiplier, unique for every symbol.

Margin for indices is calculated as follows:

Margin for cryptocurrencies is calculated as follows:

Margin for metals does not depend on leverage:

These multipliers were introduced for adjusting the preset leverage ratio, which is 500:1, to satisfy the risks of every particular traders’ instrument. Market price represents the product price in monetary terms.

We are looking forward to launch stop outs simultaneously with the product release. This will automatically keep investors’ accounts safe from going negative in case of entering into a losing trade.