As the name suggests, this is the amount of money you have left after opening positions. You can use this amount of money to open new positions.
This is the total value of your trade positions.
For example, if you use SGD1,000 to open a SGD5,000 position (stock margined at 20%) and SGD500 to open a SGD5,000 position (stock margined at 10%), then your initial margin will show SGD1,500 which supports two trade positions with a total gross exposure of SGD10,000.
Gross Liquidation Value (GLV)
Gross Liquidation Value is the total sum of money that you can recover if you wish to close your account. It includes the return of initial margin from closing off all your positions, and whatever free equity you have.
This is the sum of money which is needed to maintain all your leveraged positions.
A margin call happens when your account suffers losses and has insufficient money to support the open positions that you have.
If your margin utilisation is above 105% by the end of the trading day, you will be required to satisfy the margin call by either depositing funds or by reducing your existing open positions.
Margin Utilisation = IM GLV
If it is above 100%, you have 2 days to top up your account.
If it is above 133%, you have 1 day to top up your account.
Your Trading Representative will begin force selling if you do not top up your account.
Margin Utilisation %
If you have SGD3,000 in deposit and you leverage it fully to open a SGD30,000 position (stock margined at 10%), your margin utilisation will show 100%.
If you have SGD3,000 in deposit and you use only SGD2,000 to open a SGD20,000 position (stock margined at 10%), then your margin utilisation will show 67%.
A healthy margin utilisation would be under 90%. It is important to leave a little money to buffer any potential losses on your open positions. Levels above 100% mean you are over-leveraged and will go into margin call.
Your profit and loss in various currencies will be converted to your account home currency using our end of day mid-rate.
Leverage Ratio (Margin Requirement)
Leverage provides you the ability to trade a larger amount with smaller initial deposit. The leverage ratio is a directly function of margin requirement.
For example if the leverage ratio for EUR/USD is 1:25, with a US$100 deposit, you can trade up to US$100 x 25 = US$2,500. The leverage ratio of 1:25 is equivalent to 4% (1/25 * 100%). Hence, to trade a notional amount of US$2,500 at 4% margin requirement, you need to put aside US$100 as margin amount to open this position.
Leverage ratios or margin requirements differ for different currency pairs determined by us from time to time.
Margin call occurs when your account equity falls below 100% of your margin used. You will need to make an additional deposit to resolve the margin call. Alternatively, you can close out some or all of your open positions to reduce your margin used. When your account is in margin call status, you are unable to open new positions but you can close out existing open positions.
E.g. you have US$5,000 in your account opening balance and you bought 100,000 EUR/USD position at 1.0650 for 4% margin requirement, your margin used will be US$4,260 (4% X 100,000 EUR X 1.0650 = US$4,260). Assuming the price falls to 1.0550 (100 pips), the unrealized loss is US$1,055. The account equity is now US$3,945 which is less than 100% of the margin used (US$4,260), your account is in margin call status.
Swaps, often known as overnight interest or rollover interest, are interest payable or receivable for holding open positions overnight. You may pay or receive interest depending on the direction (buy or sell) and currency pair you rolled over to the next trading day at New York close. The interest amount is dependent of the notional amount you rolled over and the swap points quoted in pips.
Stop Out Level
In the event the account equity drops below 30% of the margin used at any point in time regardless whether an official margin call notification is issued to you, the system will automatically close out all open positions in your portfolio to prevent further loss to your capital.
Please be informed that the sell-out of all open positions is triggered by the system as market orders. You may lose more than your capital in some adverse market conditions.
Exchange Traded Fund
An Exchange Traded Fund ("ETF") is an open-ended investment fund listed and traded on stock exchanges (e.g. SGX and NYSE Arca), that generally aims to track the performance of an index.
An index is formed by a basket of securities and is calculated by aggregating the value of the securities and expressing it against a base value. An index reflects the movement of an entire market. The index constituents are selected by the Index Provider from a list of securities which the index represents.
Specified Investment Products
These products have complex features and risks that can be difficult to understand. Under these guidelines, both existing and new clients are required to be formally assessed by their broking firm for relevant knowledge and experience in trading Exchange Traded Funds (ETFs).
Bonds and Fixed Income
Bonds and Fixed Income
Bonds and fixed income securities are debt instruments issued by governments and corporations.
Conventional bonds confer ownership of a debt on the investor
Shariah-compliant bonds grant the investor a share of an asset.
These instruments may be listed or unlisted.
Islamic bonds, commonly referred to as Sukuk, are structured in such a way as to generate returns to investors that comply with Islamic law and its investment principles. Sukuk represents undivided shares in the ownership of tangible assets relating to particular projects or special investment activity. They are available for investors who wish to adhere to Shariah principles.
There are various types of sukuk structures relating to the nature of the underlying asset. The most commonly used is where the sukuk relates to a partial ownership of an asset ("sukuk al-ijarah"). Other types of these bonds relate to partial ownership of a debt ("sukuk Murabaha"), project ("sukuk al-istisna"), business ("sukuk al-musharaka"), or investment ("sukuk al-istithmar"). Investors would still need to make their own independent assessment as to whether the particular Sukuk satisfies Shariah principles before investing.
More information on Islamic bonds is available to Maybank Securities clients. Please contact your Trading Representative.
Within the category of fixed income securities, preference shares are hybrid instruments, comprising properties of both equity and debt instruments. Preference shares usually carry a fixed preferential rate of dividend. They are usually non-voting shares. Unlike bonds, there is no maturity date but the issuer can repay the principal in full on the "call date".
Generally, in the event that the issuing company is liquidated, bondholders will have a higher priority claim on the company's assets, followed by the preferred shareholders. Only after these two groups of investors have been repaid, will the common shareholders of the company recover anything from the estate of the liquidated company. Preference shares are dealt on both listed and unlisted platforms.
Listed and Unlisted
Bonds and fixed income securities can be listed or unlisted. Examples of locally listed bonds and fixed income securities can be found on SGX-ST's Fixed Income Board, with domestic and foreign issuers including sovereigns (e.g. Indonesia), statutory boards (e.g. HDB/LTA) and corporations (e.g. DBS/Capitaland).
Differences Between Listed and Unlisted Bonds and Fixed Income Securities
There are 2 key distinctions between listed and unlisted bonds and fixed income securities:
Pricing Conventions Listed bonds and fixed income securities on SGX-ST are quoted on a 'dirty' basis, where the accrued interest on the next coupon payment is factored into the price. Unlisted/OTC bonds and fixed income securities are quoted on a 'clean' basis, where the price does not include accrued interest.
Dealing Size The OTC bonds and fixed income market typically deals with a larger minimum ticket account size. Hence, it often experiences better liquidity.
Special Purpose Acquisition Companies
Special Purpose Acquisition Companies ("SPACs") are formed to raise capital through IPOs for the sole purpose of acquiring operating business(es) or asset(s) (i.e. business combination). Such acquisitions may be in the form of a merger, share exchange or other similar business combination methods. Prior to a business combination, SPACs are listed investment vehicles with no prior operating history and revenue-generating business/asset at IPO.
In light of market developments, increased interest, and potential M&A opportunities in the Asia Pacific, SGX has launched the Special Purpose Acquisition Companies (SPACs) Framework to introduce a new listing vehicle to the Singapore market. SGX believes that the introduction of SPACs will generate benefits to capital market participants and become a viable alternative to traditional IPOs for fundraising in Singapore and the region.
Investing in a SPAC listing can largely be seen as investing in the founding shareholders' profile and abilities to identify companies and execute business combination transaction. In Singapore, SPAC sponsors must complete a business combination (i.e. de-SPAC) within 24 months from IPO, with an extension of up to 12 months subject to fulfilment of prescribed conditions.
A call warrant gives the holder a right, but not the obligation, to buy from the issuer the underlying asset at a predetermined price, also known as the exercise price, on or before the expiry date, depending on the exercise style of the warrant.
A put warrant gives the holder a right, but not the obligation, to sell to the issuer the underlying asset at a predetermined price, also known as the exercise price, on or before the expiry date, depending on the exercise style of the warrant.
A structured warrant is a form of structured investment products issued by a third-party financial institution over a wide range of assets, including the shares of an un-related listed company, a basket of companies' shares or an index, and traded on SGX.
Structured warrants can be issued either as a call or put warrant. A call (or put) warrant gives the holder a right, but not the obligation, to buy from (sell to) the issuer the underlying asset at a predetermined price, also known as the exercise price, on or before the expiry date, depending on the exercise style of the warrant.
In general, structured warrants enable investors to express their view of the performance of the underlying asset in a bullish or bearish market, at a significant degree of leverage over the life of the structured warrant. In addition, put warrants may be used by investors to hedge against the downside risk of one's investment holdings.
Warrants have a fixed tenure and, if not exercised, are worthless after their expiry date.
Can't find what you're looking for?
We're here to help you, contact us with your enquiry and we'll get back to you soon.