How to use SmartSave

1. What is SmartSave?

SmartSave is an automated financial service provided by Futu Securities for managing idle funds. Once activated, any uninvested cash in your securities account will automatically be invested in Cash Plus (MMF) after the market closes each trading day. These money market funds are included in your buying power, allowing you to trade stocks, participate in IPO subscriptions (with zero financing interest), or invest in other mutual funds.

If your account has a deficit, an equivalent amount from your Cash Plus holdings in the same currency will be automatically redeemed to cover it. Additionally, if you hold short positions in Hong Kong stock options and your account's cash and collateral from long positions are insufficient to meet margin requirements, your Cash Plus (MMF) holdings will be automatically redeemed to cover the shortfall.

 

2. How to enable SmartSave

SmartSave supports both auto subscription (SmartSave-Buy) and auto redemption (SmartSave-Redeem). To enable auto subscription, simply open a cash account or margin account for the relevant market and activate fund trading permissions. Auto redemption requires a margin account for the corresponding market.

 

3. SmartSave

3.1 SmartSave-Buy

You only need to set up the auto subscription once. Once enabled, you will receive a notification between 07:00 AM and 07:30 AM, Monday to Friday, and the auto subscription will be executed between 08:30 AM and 09:00 AM. Any cash exceeding your retained amount will be automatically invested in Cash Plus (MMF).

Retained amount: You can set a retained amount for each account. Only funds exceeding this amount will be automatically subscribed to money market funds. For example, if you have HK$1,000 in your account and set the retained amount to HK$400, then HK$600 will be used for the next auto subscription.

3.2 SmartSave-Redeem

Once auto redemption is enabled for your margin account, your Cash Plus (MMF) holdings can be used directly for stock trading, IPO subscriptions, or investing in other types of mutual funds. No manual redemption is required.

Redemption amount:

An amount equivalent to your account deficit (including frozen funds for IPO subscriptions) will be automatically redeemed from your money market funds. Only funds in the relevant currency are redeemed to cover the deficit. If money market funds are used as margin for Hong Kong stock options, an equivalent amount will be redeemed, which may involve multiple currencies (e.g., USD or RMB money market funds).

Redemption schedule:

For all clients who have enabled auto redemption, two automatic redemptions are processed daily: from 6:00 AM to 6:40 AM and from 8:00 AM to 8:30 AM (Hong Kong Time). For clients holding short positions in Hong Kong stock options, an extra auto redemption occurs at 5:00 PM on each business day.

Redemption sequence:

If you hold multiple money market funds, the fund with the lowest current 7-day annualized return will be redeemed first. For example, if you have both Fund A and Fund B, and Fund B has a lower 7-day return, Fund B will be redeemed first. If Fund B's balance is insufficient, Fund A will be redeemed next. For funds used as margin for Hong Kong stock options, the redemption order is: HKD fund first, then USD fund, then RMB fund.

3.3 How to access SmartSave

Open the app and go to Wealth > Cash Plus > Manage SmartSave. You can enable or disable the auto subscription and auto redemption features as needed.

3.4 Zero subscription and redemption fees

There are no fees for auto subscription and redemption of your Cash Plus (MMF) holdings. However, when using auto redemption, the redeemed fund value may not fully cover the deficit amount. In rare cases, this may result in interest charges to your account. Please pay attention to the actual deficit amount and the amount received from redemption.

3.5 Hong Kong IPO subscriptions

HKD money market funds will be included in your buying power and can be used to participate in IPO subscriptions. If a negative balance results from participating in a Hong Kong IPO, an equivalent amount of HKD money market funds will be automatically redeemed to cover the deficit. If the redeemed HKD money market funds are insufficient to fully cover the shortfall, you will need to manually redeem USD money market funds and perform a currency exchange, or use cash to settle the remaining deficit.

Notes:

1. Currency exchange is available 24 hours a day, 5 days a week (24/5).

2. Manual redemption of money market funds typically takes 2 business days (T+2) for the funds to settle and arrive in your account. To avoid any interest charges resulting from Hong Kong IPO subscriptions, we suggest redeeming money market funds in currencies other than HKD in advance.

3.6 Buying power

When you activate SmartSave, your money market fund assets are included in your total buying power at a ratio of 1:0.95.

For example, if you are able to purchase 2 shares of Tencent using cash, you would be able to purchase 1.9 shares with the same value held in money market fund assets.

 

3.7 Auto redemption for short positions in Hong Kong stock options

When you hold short positions in Hong Kong stock options, sufficient margin must be reserved for those positions. If your account cash and the collateral value of your long stock positions are insufficient to meet margin requirements, your Cash Plus (MMF) holdings will be automatically redeemed to cover the shortfall.

Conditions that trigger redemption:

If you hold short positions in Hong Kong stock options and your account cash plus the collateral value of your long stock positions cannot meet margin requirements, your MMF will be automatically redeemed for cash to cover the margin shortfall. In addition, if you are also participating in a Hong Kong IPO subscription and locked IPO funds tie up your account cash, the margin shortfall may increase, thereby triggering MMF redemption.

Cross-currency redemption order:

Margin for Hong Kong stock options is denominated in HKD. If your HKD MMF holdings are insufficient to cover the shortfall, redemptions will be processed in the following order: HKD-denominated funds, then USD-denominated funds, and finally RMB-denominated funds. Proceeds from non-HKD redemptions will be converted into HKD to cover the margin shortfall.

Redemption schedule:

For clients holding short positions in Hong Kong stock options, in addition to the regular redemption windows (daily 6:00–6:40 AM and 8:00–8:30 AM), an additional automatic redemption is processed at 5:00 PM on each business day.

Examples

Example 1: Insufficient margin for a Hong Kong stock option short position triggers cross-currency redemption

Assume your account has:

• Margin required for Hong Kong stock options short positions: 50,000 HKD
• Cash: 10,000 HKD
• HKD MMF: 20,000 HKD
• USD MMF: 5,000 USD
• Collateral value from long stock positions: 0 HKD

Margin shortfall = 40,000 HKD (50,000 HKD required – 10,000 HKD cash)

Redemption steps:

1. HKD MMF is redeemed first for 20,000 HKD, leaving a shortfall of 20,000 HKD.

2. Since the HKD MMF is fully redeemed and still insufficient, about 2,564 USD is redeemed from the USD MMF (at an exchange rate of approximately 7.8, equivalent to 20,000 HKD) to cover the remaining shortfall.

 

Final result: About 2,564 USD of your USD MMF is redeemed and converted into HKD to meet the margin requirements.

 

Example 2: Margin shortfall widens after IPO deduction and triggers MMF redemption

Assume your account has:

• Margin required for short positions in Hong Kong stock options: 50,000 HKD
• Cash: 20,000 HKD
• Collateral value from long stock positions: 30,000 HKD
• HKD MMF: 10,000 HKD
• USD MMF: 5,000 USD

Current coverage = 50,000 HKD (20,000 HKD cash + 30,000 HKD collateral). This exactly meets margin requirements, so no redemption is triggered.

After the IPO subscription deadline, 30,000 HKD is deducted:

• Cash balance: -10,000 HKD (deficit)
• Margin coverage: 20,000 HKD (-10,000 HKD cash + 30,000 HKD collateral)
• Margin shortfall: 30,000 HKD (50,000 HKD required – 20,000 HKD coverage)

Redemption steps:

1. HKD MMF is redeemed first for 10,000 HKD, leaving a shortfall of 20,000 HKD.

2. About 2,564 USD is redeemed from the USD MMF (at an exchange rate of approximately 7.8, equivalent to 20,000 HKD) to cover the remaining shortfall.

Final result: About 2,564 USD of your USD MMF is redeemed and converted into HKD to meet the margin requirements.

 

Note: Due to options price fluctuations, margin requirements may change during the trading day. Since your account is exposed to both margin requirement changes and FX fluctuations, multiple redemptions may occur within a single day, or redeemed funds may later be reinvested into your MMF. Additionally, participating in HK IPO subscriptions can lead to post-subscription deductions, further tying up your account cash and potentially increasing MMF redemption amounts. To avoid frequent MMF redemptions, we recommend maintaining sufficient cash in your account to cover options margin requirements, or reducing your short positions in Hong Kong stock options.