Margin trading is essentially borrowing funds from a broker to purchase securities such as shares. When you trade on margins by using the funds in your account as collateral, you can purchase more securities and as a result increase your trading power.
Expressed as a percentage, the margin represents the amount of funds you can have in your margin trading account.
With margin trading, you can enjoy a huge boost in your ability to trade through leverage. A 50% margin effectively doubles your trading power, allowing you to invest your capital more efficiently.
Pledging your existing equities as collateral helps your assets work harder for you.
Trading on margins means an investor has to pay interest on the loan effectively taken out from a broker. At UOB Kay Hian, we maintain interest rates at as low as 7% for securities.
We provide online margin financing services of nearly 800 Hong Kong stocks, 1,000 U.S. stocks and more than 400 A Shares.
We offer extra capital up to 80% of the prevailing marketing value of the stocks holding. Clients may enquire the margin ratio of each stock enquire the margin ratio of each stock accordingly under "Margin Ratios".
The online subscription process is quick and easy. Clients may simply open a H.K./ A-Share or U.S. stock margin account to enjoy our margin services.
Trading on margins means using debts or borrowed funds to invest in other financial instruments. In this situation, both gains and losses can be greatly amplified.
When trading on margins, the amount of capital required to enter into the arrangement may be small relative to the value of the transaction. However, investors should be aware that even a small movement in the price of the asset can have a significantly larger impact on your investment, which may result in losses far greater than the initial capital invested.
If the market moves against the position that an investor is holding, it may result in margin calls. These are requests to place additional funds on deposit with the broker to cover the shortfall in the funds requirement level necessary to maintain the position.
If an investor is unable to provide the additional funds, the broker may sell the shares he or she owns without prior notice. In this situation, the investor is liable for all further losses incurred as a result.
When trading on margin, some investors might not have fully considered the total value of the contract they have entered into. As a result, they might fail to fully appreciate the true extent of the losses they are potentially exposed to, which may exceed their financial resources.
Open a UTRADE account with us today and start trading on the premier platform you deserve.
Please click to open a "Margin Securities Account" online. Filling in the form in just 3 steps.
You may also choose to fill in and submit the "Cash or Margin Account Application Form" in hard copy.Learn More
If you have not applied for U.S. stock margin financing services, please download the "W-8Ben Form". Submit the original copy of the completed application form to our Client Service Department by mail.
The applications will take 1-2 workings days to process. After the successful applications, clients will be able to enjoy the U.S. margin financing services.