1. Risk status
|Judgment conditions||Risk status of accounts||Notes|
|When you haven't traded on margin or short selling.||safe||Depending on the holding positions, the fewer the holding positions are, the "safer" your account is.|
|Account Equity > Initial Margin Requirements, or there's a short sale.||medium ||Depending on the leverage ratios, the fewer your leverage ratio is, the "safer" your account is.|
|Margin Call Margin Requirement < Equity < Initial Margin Requirement ||warning||At this time,the buying powerhas been used up, so no new positions can be opened; please pay careful attention to market changes to prevent themargin call.|
|Equity <MarginCall Margin Requirement ||dangerous||The account has reached the condition for liquidation, please deposit cash or liquidate positions.|
2. Market value of securities
The sum of the market value of the stocks and securities derivatives in your account's position.
The total amount of cash in your account, including your own funds and funds from the short sale of shares. A negative cash balance indicates that you have a debt on that account.
For example, if you have $100,000 in cash in your account andyou sell short stocks valued at $50,000, the total cash in your accountwill be$100,000 + $50,000 = $150,000.
4. Long market capitalization
The sum of the market value of your account's long positions in stocks and securities derivatives.
5. Short market value
The total market value of short stocks and short securities derivatives in your account, it is negative.
6. Maximum Buying Power
Maximum buying power represents the amount that can be used in your account when buying securities with the smallest margin ratio. The margin ratio for different securities may vary.
7. Short-selling Buying Power
Represents the current account and is the maximum amount that can be sold short. The margin ratio for different securities may vary.
8. Margin calls
This value represents the minimum amount of cash you need to deposit into your account (i.e. make a margin deposit) when your account triggers a "Margin Call" status. After a sufficient margin has been paid, your account will be restored to a "safe" status, avoiding the risk of being liquidated.
9. Margin Requirements
Margin requirement = ∑ Market value of the stock held * margin ratio of the stock, the margin ratio of Hong Kong stocks generally ranges from 50% to 100%.
10. Interest Charged Amount
The interest-charged amount is the amount you owe after daily settlement. The amount may fluctuate due to deposits, withdrawals, positions change, etc. Please refer to your statement for more details.
For example, if you borrow $2,000 to buy a stock on day T, then.
1. After a T-day settlement, the interest-bearing amount will be 0.
2. After the T+1 day settlement, the interest-bearing amount will be zero.
3. After settlement on T+2, the interest-bearing amount will be 2000.
When you use margin, no interest will accrue on T day and T+1 day, and interest will start to accrue after the settlement on T+2 day.
If you close the stocks you bought on T+2, then.
1.After the T+2 day's settlement, the interest-bearing amount will be 2000.
2.After settlement on T+3, the interest-bearing amount will be 2000.
3.After settlement on T+4, the interest-bearing amount will be zero.
After you close your positions of this stock, the interest will still be calculated until the settlement is completed. If you repay the negative balance by depositing cash on the same day, there will no interest generated on that day.
Note: While you have a short position, it is possible that you still have an interest-bearing amount when your 's cash is not negative.
The reason is that when you sell short, to ensure that your account has sufficient capacity to return the borrowed shares from the stock lender, there will be frozen funds valued at 105% of the short positions. The frozen funds will not be included in the cash buying power and if your account does not have enough funds as collateral, your account will be charged interest.
Example: Your account has a net worth of 9,000 HKD with 4,000 HKD in cash, 10,000 HKD in long positions, and 5,000 HKD in short positions. Just as above, the frozen funds of the short sale will be HKD5,250. Now your account only has 4000 HKD, so there will be a negative balance of 1250 HKD, and it will be charged interest.
11.Funds on Hold
11.1 Pending Orders: The funds frozen by pending orders.
11.2 Fee Withholding: Unsettled withholding transaction fees, interest on margin and securities lending, etc.
1.3 IPO Subscription: The funds are frozen for IPO subscription before subscription deduction.
Please note that the Funds on Hold will take up a portion of your account's purchasing power.
The amount of cash that can be withdrawn from your account. The unsettled amount in your account will affect this value.
For example, the HK market adopts the T+2 settlement cycle, which means that the settlement can only be completed on the second trading day after the transaction occurs.
1) Your account has $50,000 cash on the transaction date (T).
2) You bought $20,000 of stocks on day T-1 and $10,000 of stocks on day T. The amount to be settled on day T+1 is $20,000, and the amount to be settled on day T+2 is $10,000.
Then, in order to avoid settlement defaults in the next two trading days, your withdrawable cash today is 50,000 - 20,000 - 10,000 = $20,000.
The maximum amount of funds that can currently be withdrawn from an account, including the partially financing amount and the unsettled amount.