Assume stock loanable percentage at 70%

 

Customer’s available capital $30,000
Maximum value of the designated stock that the customer can buy $100,000
[$30,000/(100% – stock loanable percentage)]
If the customer buys the stock, the margin account portfolio will be as follows:
Total Loan $70,000
Effective loanable value $70,000
(Market value of the stock ×
stock loanable percentage)
Margin ratio( = Total loan / effective loanable value) 100%
(= $70,000 / $70,000)

 

Scenario 1:
If the market value of that stock increases by 10% to $110,000

Margin ratio 90.91%
(= $70,000 / $77,000)
Profit earned after the stock sold $10,000
(excluding interest and transaction handling fees)
Rate of return 33% (= $10,000 / $30,000)

 

Scenario 2:
If the market value of that stock decreases by 17% to $83,000

Margin ratio 120.48%
(= $70,000 / $58,100)
The stock will be sold by the Bank once the margin ratio reaches the sell-out level.
The amount lost after the stock sold $17,000
(excluding interest and transaction handling fees)
Rate of return – 57% (= -$17,000 / $30,000)

 

  • If the margin ratio reaches 105%, customers are required to cover the excess so as to restore the required margin ratio to 100% or below. If margin ratio reaches 115%, “EGFGL” will begin to sell your stocks to restore the required margin ratio without prior notice.
  • The required margin ratio is subject to change at the discretion of “EGEGL” from time to time.
  • Stock loanable percentage may vary from 10% to 70% among stocks. For details, please contact our staff.
  • In case of any discrepancy between the Chinese and English versions, the English version shall prevail.