Fields of HK Margin Accounts

1. Risk status

Judgment conditionsRisk status of accountsNotes
When you haven't traded on margin or short selling.safeDepending 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 warningAt 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 dangerousThe 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.

3. Cash

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 cash balance is not negative.

After you sell the loaned bond, the cash flow generated by the short sale may make up for the cash balance which was originally negative. We will calculate the financing interest based on the original cash balance.

Example:Assume that your account has HK$-1,000 cash balance and no short positions.

After the short-sale operation, the cash balance increased to HK$4,000, and the market value of the short position was HK$5,000. We use cash to offset the market value of short positions, and still calculate financing interest based on a base of HK$ -1,000

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.

11.3 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 buying power.

12. Withdrawable Amount

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.

Assuming that:

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.

13. Maximum withdrawable

The maximum amount of funds that can currently be withdrawn from an account, including the partially financing amount and the unsettled amount.