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Long Bridge Securities Pte. Ltd. provides a trading Account, with margin facilities that gives you one-click access to multiple markets around the world. However, not everyone may be suited to have margin facilities.
Longbridge Ace Account is a trading account that gives you the flexibility to manage your portfolio and allows you to trade with leverage when you need it. Your investment power can be increased through margin financing based on the asset size in your trading account.
The default credit limit in your account is zero. However, you may apply for adjustment by through the Longbridge App > "Portfolio" > tap on "Assets" > "Financing Status".
The debit balance in the account is strictly lower than the credit limit.
For example:
A client deposits $10,000 in cash and purchases shares with an IM factor of 30%. The account’s credit limit is $20,000.
Maximum purchasing power = $10,000 / 30% = $33,333
Since the client’s account has a credit limit of $20,000, the client is only allowed to purchase up $30,000 of shares ($10,000 on cash and $20,000 on financing).
Margin Call is triggered when there is a maintenance margin deficit, i.e. when Equity Balance < Maintenance Margin Requirement. The client is required to satisfy the margin call within 3 market days, including the date of the notice.
The issued margin call will be slightly higher than the difference between the maintenance margin and equity balance to serve as a buffer for price volatility.
Example for margin call:
A client deposits $10,000 in cash & $5,000 of A shares (IM: 30%, MM: 25%) and purchases $25,000 of B shares (IM: 50%, MM:45%). Suppose the market value of stock B falls to $19,500.
After the client buys the stock and the market value of stock B falls, the client's position is as follows:
The client needs to ensure that the equity balance in their account satisfies the margin requirement on or prior to the specified date.
If the client chooses to sell securities, the market value of securities to be sold needs to be at least equal to the margin call amount divided by initial margin ratio (IM Ratio)
When the equity balance is lower than the force-selling margin, the client needs to immediately top up the margin deficit amount or sell down the positions, otherwise, force liquidation might be enforced.
Note: Please contact customer service if you need any clarification or assistance on the mechanics of margin trading.
The account carries out settlements in the traded currency.
A monthly statement of account will be provided as long as there are transactions or asset balance in that month.
Please refer to the withdrawal and deposit guidelines in the Longbridge App for more details.