Margin Trading

「What is Margin Trading (Financing Trading)?」 
「Margin」is collateral that the holder of a financial instrument has to deposit with the broker to cover some or all of the credit risk. Investors who have opened a 「margin account」 in Sino-Rich can use the financing provided by Sino-Rich to make leveraged investments when trading stocks to amplify their returns. 

Margin trading, as a kind of leveraged trading, can use less capital to make investment more profitable or loss. We advise investors to have a strong risk tolerance when using margin trading. 

When conducting margin trading, the client will be deemed to pledge the securities in the account to Sino-Rich Securities according to a certain proportion, and borrow more funds from Sino-Rich Securities to buy stocks.

「Sino-Rich Securities Marginable Equity and Margin Ratio
Different stocks will have different financing ratios. For details, please refer to the Margin Ratio Table  which are sorted by Hong Kong stock code.

Examples of specific calculation methods:
The client account holds 5,000 shares of CKH Holdings (0001.HK) stock, and the current price of the stock is HK$60. According to the Sino-Rich Margin Ratio Table, the Margin Ratio of CKH Holdings stock is 75%. Therefore, the client's Marginable Value of stocks is: 5000 x 60 x 75% = 225,000 HKD, that is, the client can borrow a maximum of 225,000 HKD in total through the pledged positions.

「Calculation of Financing Interest

The financing interest rate of Sino-Rich Securities' margin account is 10% per annum 

Financing interest = arrears after settlement x financing interest rate x days of borrowing / 365

Remarks:
1. After the daily settlement, the accrued interest for the day will be calculated. You can view the accrued interest accumulated in the current month in the daily statement details. The accrued interest accumulated in the current month will generate an interest expense at the end of the month and settle it.
2. No interest is calculated for intraday trading.
3. The settlement time of Hong Kong stocks is T+2. After selling the stocks, if there are still arrears in the unsettled account, interest will still be incurred.


「Margin Call
Margin Call = Account arrears - Borrowable Limit

 After the client borrows money, if the value of the position falls, or the margin ratio of the shares held is lowered, the “Account arrears” in the margin account exceeds " Borrowable Limit ", and the excess will be subject to a margin call.

When "Loan/ Marginable Value" > 100%, you need to deposit into the account. If you don't make a deposit in time, you will face the risk of forced liquidation of your holding stocks at any time. You can also actively sell some stocks to reduce the risk of liquidation.
 
 Remarks:
 1. " Borrowable Limit" is the higher of "Total Marginable Value " and "Credit Limit" .
 2. "Total Marginable Value" is the sum of the "Marginable Value" of all stocks held by the client.
 3. "Credit Limit" is the maximum borrowing limit for the margin account.

Margin Ratio Table 
The Margin Ratio Table is for reference only. The company will consider the client's trading account situation, market conditions, changes in stock prices and other relevant factors; and has the absolute discretion to determine and provide different ratios for different clients. The Company reserves the right to adjust the above ratios or to stop providing loans for margin at all times and under any circumstances without prior notice to clients. 

To view the Margin Ratio Table, please click here.


Margin Trading

「What is Margin Trading (Financing Trading)?」 
「Margin」is collateral that the holder of a financial instrument has to deposit with the broker to cover some or all of the credit risk. Investors who have opened a 「margin account」 in Sino-Rich can use the financing provided by Sino-Rich to make leveraged investments when trading stocks to amplify their returns.

Margin trading, as a kind of leveraged trading, can use less capital to make investment more profitable or loss. We advise investors to have a strong risk tolerance when using margin trading. 

When conducting margin trading, the client will be deemed to pledge the securities in the account to Sino-Rich Securities according to a certain proportion, and borrow more funds from Sino-Rich Securities to buy stocks.

「Sino-Rich Securities Marginable Equity and Margin Ratio
Different stocks will have different financing ratios. For details, please refer to the Margin Ratio Table  which are sorted by Hong Kong stock code.

Examples of specific calculation methods:
The client account holds 5,000 shares of CKH Holdings (0001.HK) stock, and the current price of the stock is HK$60. According to the Sino-Rich Margin Ratio Table, the Margin Ratio of CKH Holdings stock is 75%. Therefore, the client's Marginable Value of stocks is: 5000 x 60 x 75% = 225,000 HKD, that is, the client can borrow a maximum of 225,000 HKD in total through the pledged positions.

「Calculation of Financing Interest
The financing interest rate of Sino-Rich Securities’ margin account is 10% per annum 
Financing interest = arrears after settlement x financing interest rate x days of borrowing / 365

Remarks:
1. After the daily settlement, the accrued interest for the day will be calculated. You can view the accrued interest accumulated in the current month in the daily statement details. The accrued interest accumulated in the current month will generate an interest expense at the end of the month and settle it.
2. No interest is calculated for intraday trading.
3. The settlement time of Hong Kong stocks is T+2. After selling the stocks, if there are still arrears in the unsettled account, interest will still be incurred.

「Margin Call
Margin Call = Account arrears - Borrowable Limit

 After the client borrows money, if the value of the position falls, or the margin ratio of the shares held is lowered, the “Account arrears” in the margin account exceeds " Borrowable Limit ", and the excess will be subject to a margin call.

When "Loan/ Marginable Value" > 100%, you need to deposit into the account. If you don't make a deposit in time, you will face the risk of forced liquidation of your holding stocks at any time. You can also actively sell some stocks to reduce the risk of liquidation.

Remarks:
 1. " Borrowable Limit" is the higher of "Total Marginable Value " and "Credit Limit" .
 2. "Total Marginable Value" is the sum of the "Marginable Value" of all stocks held by the client.
 3. "Credit Limit" is the maximum borrowing limit for the margin account.

Margin Ratio Table 
The Margin Ratio Table is for reference only. The company will consider the client's trading account situation, market conditions, changes in stock prices and other relevant factors; and has the absolute discretion to determine and provide different ratios for different clients. The Company reserves the right to adjust the above ratios or to stop providing loans for margin at all times and under any circumstances without prior notice to clients. 
To view the Margin Ratio Table, please click here.