If your available margin falls below zero, resulting in a Negative Available Margin, this will constitute a Soft Breach of your account. When a Soft Breach occurs, you will receive an email warning and all your current open trades will be automatically closed, regardless of whether they are in profit or loss.

It’s important to note that a Soft Breach does NOT represent a Hard Breach or a permanent closure of your account. You can continue trading after the Soft Breach has been addressed. However, this automatic closure of trades ensures that all traders adhere to proper risk management practices.

In trading, Available Margin refers to the simulated funds available in your account to open new positions or maintain existing ones. It is calculated as the difference between the account's equity and the used margin. Equity is the sum of your simulated funds plus or minus the profits or losses from closed positions, and the unrealized profits or losses on open positions. Used margin is the amount currently locked in to maintain open leveraged positions. Keeping track of available margin is crucial in margin trading as it affects the ability to take new positions.
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​EXAMPLE:

We apply a leverage of 1:5 on Crypto. If you trade with a $100,000 Challenge, this means that you can trade up to 5 x $100,000 = $500,000 in Crypto. If a Bitcoin has a price of $50,000, this means that you can open a maximum trade of 10 Bitcoins. If you trade these 10 Bitcoins, this means that you are using 10 x $50,000 = $500,000 margin, which is your entire available margin. So, if this trade goes into even a slight drawdown, your Available Margin will immediately become negative, and therefore your account will receive a Soft Breach.

So, if your used margin is higher than your equity, your available margin is negative.

Available Margin = Account Equity - Used Margin