01
Open an account working
Conditions for margin trading:
To meet the needs of half a year of trading experience, ** trading is OK, ** and bonds are not counted;
There must be at least 500,000 assets in the account, with an average of 20 trading days per day
You must also be at least 18 years old, have full civil capacity, and have a risk assessment questionnaire level of C4 or C5.
If these conditions are met, you can open a margin account with a qualified broker. Nowadays, most brokerages go to the counter to handle it, and some can even open it off-the-counter. In short, it is not difficult to handle margin trading, but after understanding the conditions clearly, the process is not complicated.
Use working
When trading on margin, collateral and maintenance ratios are two key elements.
First of all, the investor needs to transfer the assets to the two financial accounts as collateral, which can be cash,** or bonds. The conversion rate of collateral will also vary from product to product and there is a certain risk of volatility.
Next, when an investor opens a position, they can choose to buy or sell with their own money or borrowed funds. Margin trading and selling are the operation of borrowing other people's funds or ** to increase investment leverage, that is, to achieve long or short buying.
The maintenance ratio is an important indicator in margin trading, which is used to measure the leverage risk of investors. This ratio is equal to the total assets divided by the total liabilities. When the maintenance ratio exceeds 300%, investors can withdraw the excess collateral from the two financial accounts. When the maintenance ratio drops below 150%, the company will issue a warning notice to remind the customer that the guarantee ratio needs to be maintained. If the maintenance ratio is further reduced to 130%, the company will ask the customer to make a margin call. When the maintenance ratio drops to 110%, the company has the right to liquidate the position.
It is important for investors to understand and control the risks of margin trading. Therefore, investors should pay close attention to changes in the maintenance ratio and adjust the size of collateral and margin as needed when conducting such transactions. At the same time, it is also very necessary to understand the closing rules of each ** company to avoid unnecessary losses.
Debt repayment working
First of all, there are two types of financing repayments:
One is cash repayment, which is to repay directly with your own money. Please note that the money from the sale of securities cannot be used to repay this. By default, the repayment order is based on the contract deadline, or you can specify it yourself.
The other is to sell bonds to repay, simply put, you sell the ** you hold, and the money is paid back to the financing liabilities and other liabilities first, and the rest is your own. There are also two kinds of repayment, one is to repay directly, and use your own ** to directly return to the securities lender.
Note that the ** bought by financing cannot be used, nor can the contract be repaid on the same day, and the fee will be deducted after repayment. If the available funds are insufficient, other liabilities are borrowed, with interest accrued.
The other is to buy coupons to return, that is, to buy ** to repay. It is preferable to buy with the money from the sale of securities borrowing and lending, and it is not possible to repay the new contract on the same day. The fee will also be deducted after repayment, and the same will be dealt with if the funds are insufficient. If the underlying ** is suspended, it can be replaced with cash. So, when you play margin trading, you have to figure out your repayment method and ability, don't play too big, but it's troublesome!