Mar 24 2011, 09:28 PM
QUOTE(simplesmile @ Mar 23 2011, 11:53 PM)
Got this from CIMB
Collaterals : Quoted Share, Cash or Fixed Deposit
Margin of Financing : Up to 60%
Financing Amount : Min: RM50,000 Max: RM5 million
What does this portion mean? If I want to borrow RM50,000 then I must put in cash of RM83,333? Then I get financing of RM83,333 x 60% = RM50,000 ?
CIMB margin account is BLR - 2%Collaterals : Quoted Share, Cash or Fixed Deposit
Margin of Financing : Up to 60%
Financing Amount : Min: RM50,000 Max: RM5 million
What does this portion mean? If I want to borrow RM50,000 then I must put in cash of RM83,333? Then I get financing of RM83,333 x 60% = RM50,000 ?
Margin of Finance is 60%
with that example, if you put in cash rm 50,000, you can buy up to 2.5x meaning rm 125,000
60% margin meaning if the shares value drop to RM 75,000 (125k x 60%) there will be a margin call, of course you need to becareful with the counters you bought as there are capping and not full value given ( you can get the marginable counters and its capping).
If you use shares as collateral then the value will be based on the marginable list up to 1.5x
This is very cheap cost of fund and proven useful during a bullish market, however it will be a double-edged sword during market down trend
Pm for more info
This post has been edited by Remng: Mar 25 2011, 08:20 AM
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