Taiping Securities (HK)'s margin financing services on securities and IPO can provide clients with high trading flexibility, with advanced Taiping internet trading system which can assist clients in seizing every investment opportunities.
Securities Margin Financing - Maximize buying power
Clients can enhance their buying power via the margin financing services. Given the pre-approved credit limit, clients may pledge their Taiping Securities Margin Account as collateral to increase their buying power by leveraging their assets effectively in accordance with respective cost and risk.
For example, if you have $10,000 cash in a margin account and the maximum margin rate is 50%, then your total buying power is $20,000. For a non-margin account, the buying power is equal to the amount of cash in the account.
IPO Margin Financing - Seizing Every Investment Opportunities
Clients may make use of our IPO margin financing facility to increase the subscription volume of shares. Maximum IPO financing ratio can be up to 90%.
When Does Margin Call Occur?
When Loan ratio is greater than 105% after the market hours, clients would be received a margin call notice and being requested to settle the margin call in order to lower the loan ratio back to normal level (under 100%) before the designated time.
Loan Ratio = Loan Amount / Margin Value
An example of margin call
A client holds $50,000 of stock A（Margin value $30,000; margin ratio 60%）and purchases $30,000 of stock B (0 margin ratio)on margin. The client's position is as follows.
Debit Balance $ -30,000
Market Value $ 50,000 (Stock A) + $30,000(Stock B)
Margin Value $ 30000 (Stock A margin ratio 60% + Stock B margin ratio 0)
Loan Ratio $ -30000/30000=100%
Assume the value of stock A falls to $28500 after the market hours;
Loan Ratio$ -30000/28500=105.26%
An official margin call notice would be sent out and the client is required to lower the loan ratio back to normal level (under 100%) by making deposit or selling securities on or before the designated time.
Otherwise, the position may be liquidated immediately.
Note: When the loan ratio is higher than 120%, we may liquidate the positions immediately without any notice.
Please contact your account manager or customer service if you need any clarification or assistance on the mechanics of margin trading.