40085-95579
(852) 2823-0388
English
Under what circumstances will margin calls be issued?
When the loanable value of securities in the client's account falls below the outstanding settlement amount, the Company may issue a margin call notice to the client at any time.
Example:
A client holds one lot of HSBC Holdings (market value of approximately HK$40,000) in the margin account with an outstanding balance of HK$20,000. Assuming the lending ratio for HSBC Holdings is 50%, the client is eligible for a loan of HK$20,000, hence no margin call will be triggered. If the share price drops and the market value falls to HK$30,000, the client will be notified to deposit an additional HK$5,000 in collateral.
If I receive a margin call notice, can I still purchase securities or withdraw funds?
No. Clients may only purchase other securities after depositing sufficient margin.
Fund withdrawals and securities purchases are only permitted when there is a positive account balance. If the account is in deficit, no fund withdrawals are allowed even with available credit facilities; securities trading is still permissible only within the credit limit.
After receiving a margin call notice, by when do I need to top up my margin position?
Clients must deposit cash, eligible collateral securities or sell held securities within one trading day upon receipt of a margin call notice. Otherwise, the Company reserves the right to sell the client's securities at any time without prior notice.
How to calculate interest on margin accounts?
If you hold a margin account, the financing interest rate is Prime Rate plus 3.0%. Interest accrues monthly and will be deducted from your account at the end of each month.
Example:
Assuming the prevailing prime rate is 5.25% and your financing amount is HK$50,000, the daily interest is calculated as follows:
HK$50,000 × 8.25% × (1/365) = HK$11.30
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40085-95579
(852) 2823-0388
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