Margin trading

Overview of Margin Trading

• Margin trading is a form of borrowing money from securities companies to buy securities. Margin trading activities create good opportunities, improve investment efficiency, but also have many potential risks. Studying carefully about margin trading is extremely important to earn good profits and avoid risks.
• Margin trading is using leverage in stock investment activities. In other words, if your investment activities are effective, the profit from the investment can increase many times compared to just using your own capital.
• Each type of business has certain advantages and disadvantages. Investors need to carefully research market trends, their own capabilities, investment methods, and stocks they are investing in to make appropriate decisions. The advice is that if the market trend is determined to be an uptrend, investors can increase the yield from margin buying activities.

How and instructions for performing Margin Trading

1. Margin Limit

• Not exceeding 3% of NVS’s equity according to the most recent audited financial statements.
• Clients can disburse multiple times but the total loan balance (including principal and interest) must not exceed the Margin Limit at any time. If the Customer has a total loan balance Exceeding the Line of Margin Limit, the Customer must pay the excess on the same day.

2. Tỷ lệ ký quỹ

• In there:
  • Equity = Total Assets – Margin Debt Balance
  • Outstanding Margin = Total outstanding principal and interest of the Loans.
  • Total Assets = Money + Proceeds from selling securities waiting to be returned + Total Value of Margin Securities currently available and/or waiting to be returned on the trading account.

• • Initial margin: 50%
  • Safe margin: 40%
  • Warning margin: 35%
  • Reclaming Margin: 30%

3. Regulations about lending

• Margin trading interest rate: 0.04%/day
• Overdue interest: 150% interest rate.
• Terms and contract extension conditions:
  • Maximum 90 (ninety) days from the date NVS disburses the Loan
  • The Term can be extended for a maximum of 90 (ninety) days.
  • Starting date to calculate Interest Rate: Unon NVS’s disbursement of the Loan.
  • Loan Interest Rate: 0.04%/day. Minimum loan interest is 50,000 (fifty thousand) VND.
  • Overdue interest rate is 150% of Loan Interest Rate.

4. Method of making additional margin calls

Step 1

Since receiving the additional margin call, the customer must inject corresponding collateral to ensure the maintained margin ratio. Collateral injection is implemented as below:

• Injecting collateral as securities, the value of additional collateral securities is calculated according to the following formula:

• In case of money, the monetary collateral is determined according to the following formula:

Step 2

• Securities companies have the right to sell mortgaged securities on the customer’s margin trading account when the customer does not add or does not fully inject collateral within the time limit according to the additional margin call.
  • In case the customer does not inject or only injects a part of the collateral, depending on the value of the collateral that needs to be injected, the remaining collateral is smaller or larger than the total value of securities on the trading account escrow, securities companies are allowed to sell part or all of the mortgaged securities;
  • Before executing the order to sell mortgaged securities, the securities company is responsible for notifying the customer and after the sale, the securities company is responsible for sending the customer a statement of the results of the sale transaction of mortgage securities according to the method agreed between the securities company and the customer in writing.
• In case the securities company sells all securities on the margin trading account at the request of the customer or when making an additional margin call, the customer can only withdraw the remaining money (if any).) from the amount of securities sold on the margin trading account after deducting the margin balance.
• In case the total assets on the customer’s margin trading account after selling mortgaged securities are not enough to cover the outstanding margin debt and the customer does not pay the remaining loan debt as agreed at Contract to open a margin trading account, the securities company shall collect debt according to the method agreed in the Contract to open a margin trading account and according to the law.

Fees

• Price list of securities services at Navibank Securities Joint Stock Company (applied from December 1, 2023)

See more detail here.

 

List of securities for margin trading of NVS

Margin directory	Time	Download
List of securities for margin trading in April 2024	06/05/2024	Dowdload
List of securities performing margin trading in the second quarter of 2024	11/04/2024	Dowdload
List of securities for margin trading in March 2024	04/03/2024	Dowdload
List of securities to carry out margin trading in February 2024	04/02/2024	Dowdload
List of securities for margin trading in January 2024	04/01/2024	Dowdload