With a margin account, you do not need one hundred percent of the purchase price deposited in your account in order to purchase a stock. Stock that you already own can be used as collateral to purchase additional stock or even for a personal loan. In a cash account you can only purchase securities with cash from your account at the full purchase price.

The majority of individual investors in Hong Kong trade in cash, which means that they pay cash for the shares they buy and receive cash when they sell the shares. Unlike cash accounts, margin accounts allow the investor to trade on credit. Investors can trade in amounts larger than the deposits in their margin accounts. Securities companies provide the balance by way of loans to the investor and in return, keep the securities purchased as collateral.

You may withdraw cash when you sell your shares or when there is a credit balance in your account. Margin percentage must be at least 140% after cash withdrawal.

Yes, you may withdraw cash arising from sales proceeds or trading profits provided the withdrawal does not result in the margin percentage falling below 150%.

Yes, you must inform us latest by the due date of the purchase contract. Margin percentage must be at least 140% after taking in the value of the purchases and interest is payable immediately.

If you trade in a cash account then you are subject to Federal Reserve Regulation T, which covers credits granted by brokers. Funds from sales take 3 days to clear. If these funds are used to buy and sell another security within those 3 days, then a violation of this regulation has occurred Some of the patterns are more prone to causing these violations than others.

A margin account is an account you establish at a brokerage firm that lets you borrow from your broker. A margin account lets you take a secured loan against your own portfolio. The advantage is that you do not have to sell any of your portfolio to obtain the cash. Furthermore, you generally have no repayment schedule. You are free to repay the loan at anytime, unless your collateral falls below the required amount.

You will need to provide additional margin of cash and/or marginable securities to bring the margin percentage to not less than 140%

Cash Contributions: Cash Contributions are considered to be those made by cash, check or credit card. The use of these gifts may be either restricted or unrestricted. These gifts may be the part of an outright (current) gift or a planned gift. Non-Cash Contributions: Non-Cash Contributions include such items as securities, real property, and/or personal property. These gifts may be restricted or unrestricted.

Example: When one position comprises greater than 70% of the value of an account the margin requirement for that concentrated position rises from say 30% to 35% due to the risk of having "all your eggs in one basket." If the one position comprises greater than 90% of the value of an account the margin requirement for that concentrated position rises further to say 40%.

Your potential losses are greater due to leverage if there is adverse market movement. If the market value of your securities declines, maintenance calls must be met on specified dates or usdirect will liquidate your securities to meet the call. The timing of such a sale could be unfavorable. The potential loss on short sales is without limit because there is no ceiling on the price of stock. You need to weigh the risk involved with margin trading before you decide to use this tool.

Margin accounts are only available for investment accounts. If you don't have a CIBC Investor's Edge account, you may apply for margin privileges by completing a CIBC Investor's Edge Investment Account Application. If you already have a cash investment account and wish to convert to a margin account, check the "Update an Existing Account" box on the top of CIBC Investor's Edge Investment Account Application, provide your account number and fill in the sections you need to change/update i.e.

We will accept margin account transfers on a case-by-case basis. Please contact us before transferring a margin account.