Maybank - CFD

Why trade in CFDs with Us?

You can go long or short on stocks when you trade Contract for Difference ("CFDs") with us. Maybank Securities clients enjoy 100% price and volume transparency with our Direct Market Access ("DMA") business model. We put all trades directly through to the stock or index market which means the price and volume quoted on our CFD platform will always be the same as that of the underlying market.

We do not impose rollover fees. There is no contract expiry and your open positions will remain open for as long as your account has sufficient funds to meet margin requirement, or until you decide to close them.

In addition, you can trade seamlessly from a single account and enjoy access to thousands of share CFDs listed on many global markets. You can also view all your positions in one portfolio in real time.

How it Works

CFDs enable clients to take advantage of any market trend.

Start Trading - Go Long or Short with Leverage

You can go long - by buying low and selling higher - when you expect upward price movements, or short - by selling high and buying back lower - to take advantage of downward price movements.

Short Selling

Short selling a stock is as easy as one click of the 'sell' button. Short selling a counter is, however, only possible if there is sufficient 'scrip borrow' in our system. This varies on a daily basis. You can easily check if a counter is shortable from any Buy or Sell order ticket on our platform.

Should there be insufficient 'scrip borrow' for the day, please call our CFD Team at +65 6536 2000 to help source for scrip. Sourcing scrip is on a best-effort basis.

Who Can Trade in CFDs

Leverage

Leverage your deposit by up to 10 times for Share CFDs. This means that with a deposit of SGD1,000, you will be able to open up to a SGD10,000 position if this counter is margined at 10%. Margins are different for each counter and this is pre-set by Maybank Securities.

View all tradable counters and their margins here, under the "List of Markets and Tradable Counters" section in the FAQs section.

Convenience

Clients enjoy convenience and flexibility without the need for a margin or scrip borrowing account.

Risks of Trading in CFDs

CFDs and other investment products involve the risk of loss and are not suitable for many members of the public. Before investing in CFDs, you should carefully consider your financial situation and consult your independent financial adviser on the suitability of CFDs for you.

Highly Volatile

CFDs are derivatives transactions that provide for adjustment between the parties based on the respective values or levels of certain assets or reference indices at the time of the contracts and at an agreed future time. Such assets or references indices can be shares, debentures or stocks, among others. There is no delivery on these contracts – they can only be settled in cash.

The prices of CFDs and the underlying asset or reference indices may be highly volatile and may fluctuate over wide ranges.

Losses May Exceed Initial Deposit

CFDs are leveraged transactions. An investor must deposit collateral, or "margin", with Maybank Securities in order to transact. The high degree of leverage that is often obtainable in margin trading can work against the investor as well as for the investor due to fluctuating market conditions. The investor may sustain large losses as well as gains in response to a small market movement; while the initial margin required to enter into a transaction may be small relative to the value of the transaction, a relatively small market movement would have a proportionately larger impact. Hence, the investor may sustain losses in excess of any cash and any other assets deposited as collateral with Maybank Securities.

The investor may be called upon at short notice to make additional substantial margin deposits or interest payments. In certain instances, the investor's position may be liquidated without his or her consent or notice.

Commissions and Charges

Before you trade, you should familiarise yourself with the details of all commissions and other charges for which you will be liable.

No Guarantee that Loss will be Limited

Under certain trading conditions, it may be difficult or impossible to liquidate a position, even if the reference asset for a CFD is quoted exactly as the same prices seen in the underlying exchange.

For example, this may occur if the price of a security on an exchange rises or falls so rapidly that trading on the exchange is restricted or suspended. A "stop loss" order therefore cannot guarantee that your loss will be limited.

Not Transacted on a Regulated Exchange

All CFDs will be entered into with Maybank Securities transacting as principal. They are not transacted on a regulated exchange, and the terms and conditions of CFD will be established solely by Maybank Securities.

The investor's rights and obligations under a CFD are not assignable or transferable to any person, and the transaction can only be closed out with Maybank Securities during Maybank Securities' normal trading hours.

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FAQs

What are some common CFD terms used on the platform?

There are a few terms on our platforms that you need to be familiar in order to understand your portfolio

There are a few terms on our platform that you need to be familiar with in order to understand your portfolio.

Gross Liquidation Value (GLV)
When you first deposit SGD3,000, the Gross Liquidation Value will show SGD3,000. If you use SGD2,000 as the initial margin to open a SGD20,000 position (stock margined at 10%), you will have SGD1,000 left in free equity. GLV : SGD3,000
IM : SGD2,000
FE : SGD1,000

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.

Initial Margin
When you use SGD2,000 to open a SGD20,000 position (stock margined at 10%), the initial margin would reflect SGD2,000. This is the sum of money which is needed to maintain all your leveraged positions.

Free Equity
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. For example, if your free equity is SGD1,000, you can open up to SGD10,000 of positions (stock margined at 10%). If you attempt to open more than SGD10,000 of positions, your trade will be rejected.

If you have open positions and they make a profit of SGD500, you will have Free Equity of SGD1,500. Essentially, GLV = IM + FE.

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.

Gross Exposure
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.

What is a margin call?

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 divide

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.

What are contingent orders?

A useful feature on CFD is Contingent Orders. These are orders you can pre-set, and they will trigger and go into the market once the price you have specified is reached. See our detailed user guide on contingent orders here. All Contingent Orders are non-guaranteed. In the event of price gaps, your order might not be triggered.

Example 1:
You have no existing positions. Stock A is currently trading at SGD2.95. You feel that Stock A only has potential upside if it breaks SGD3.00. You can place a contingent order to buy 10 lots of Stock A at SGD3.01 only if it trades at SGD3.00.

Contingent orders are Good-Till-Cancelled and will remain in the system until you delete them.

Example 2:
You have 10 lots of Stock B at SGD3.00. You want to take profit at SGD3.10. Stock B is currently trading at SGD3.02. You can place a contingent order to sell 10 lots of Stock B at SGD3.10 only if the last traded price hits SGD3.10.

Contingent orders are Good-Till-Cancelled and will remain in the system until you delete them. If you decide to sell Stock B at SGD3.05, just note that your contingent order which you have previously set is still "live". This means that if Stock B hits SGD3.10 and you did not delete your contingent order, you will have a 'short' position of 10 lots of Stock B at SGD3.10.

How do I qualify for CFDs trading?

In 2012, the Monetary Authority of Singapore (MAS) introduced guidelines for broking firms to provide safeguards to retail investors who wish to trade certain 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 Contracts for Difference (CFDs).

Learn more about CFD Trading on the ABS-SAS Online E-Learning Portal.

If you wish to qualify for CFD Trading, please visit any of our Customer Service Centres or Investor Centres to complete the Client Proficiency Assessment (CPA) Form. Alternatively, you may download the form here and mail it to:

Maybank Securities Pte Ltd
Client Services Department
50 North Canal Road
Singapore 059304

How to open and fund your account?

To open a CFD account with us, a minimum deposit of SGD3,000 is required. This deposit can be used to open long or short positions. Only cash deposits are accepted (no pledging of shares or use of CPF monies). Find more information on how to fund your account.

You will receive your UserID via email and your password within the week.

Learn more about CFDs from these articles from MoneySENSE:
Making Sense of CFDs
The 'Long' and 'Short' of Leveraged Trading

This information is provided by Securities Association of Singapore and Monetary Authority of Singapore as part of the MoneySENSE national financial education programme.

How do corporate actions impact CFDs?

CFD mirrors the corporate actions related to the underlying share. Here are 2 examples of common corporate actions:

Dividends
If you have a long CFD position, your account will be credited with the dividend (net) on the ex-date.

If you have a short CFD position, the dividend (gross) will be deducted from your account on the ex-date.

Rights Issue
If Company A declares a 1-for-2 rights issue at SGD5.00, and if you are holding 1,000 Company A CFDs on or after the ex-date, you will have 500 Company A Rights CFDs credited into your trading account.

After the credit adjustment, you will have a long position of 1,000 Company A CFDs and a long position of 500 Company A Rights CFDs. You can choose to exercise the rights via the Rights CFDs, sell the Rights CFDs, or let it lapse.

If you have shorted 1,000 Company A CFDs on or after ex-date, you will have a short 500 Company A Rights CFDs position debited from your trading account.

After the debit adjustment, you will have a short position of 1,000 Company A CFDs and a short position of 500 Company A Rights CFDs. You will be required to close the 500 Company A Rights CFDs position during the rights trading period.

Please contact your Trading Representative if you have queries on other kinds of corporate actions.

What markets and counters are available?

Share CFDs available for trading are reviewed regularly to ensure they are competitively margined and that they reflect current levels of liquidity and volatility, amongst other factors that affect risk. Please call the CFD Dealing Desk at 6536 2000 should you wish to trade a counter that is not listed here.

Share CFDs – Markets, Tradable Counters and Margin Requirements

Market	Indicative Counter List and Margin Requirement
Australia	ASX
China 'A' Shares (SH-HK Stock Connect)	SHG
Hong Kong	HKE
Indonesia	IDX
Malaysia	KLS
Singapore	SGX
United Kingdom	LSI LSE LSE Price Feed Subscription
United States	NYSE NASDAQ AMEX NYSE ARCA NYSE/NASDAQ Price Feed Subscription

How do I receive my statements?

A statement will be sent to your email every day whether you have made a trade or not. This statement will usually be sent in the evening and will provide details of the trades you made the previous day.

Please contact your Trading Representative if you have any queries regarding your statement.

How does leverage magnify my profits or losses?

The use of leverage can magnify gains as well as losses. Comparing CFD, Margin and Stock Trading in the tables below, the returns a client can make on a profitable long trade using CFD (10 times leverage) and Margin (2.5 times leverage) are magnified because of the use of leverage. On the flip side, losses are magnified as well if the trade is loss-making.

Profits are magnified with higher leverage:

Action	Item	CFD	Margin	Cash
Buy	Share	10,000	10,000	10,000
	Buy Price	SGD5.00	SGD5.00	SGD5.00
	Contract Value	SGD50,000	SGD50,000	SGD50,000
	Cash Outlay	SGD5,000	SGD20,000	SGD50,000
	Gearing	10 times	2.5 times	-
	Add cost
	Brokerage	SGD135.00	SGD200.00	SGD137.50
	Exchange Fees	-	SGD23.75	SGD23.75
	GST	-	SGD15.66	SGD11.29
	Net Purchase Value	SGD50,135.00	SGD50,239.41	SGD50,172.54
Sell	Sell Price	SGD6.00	SGD6.00	SGD6.00
	Contract Value	SGD60,000	SGD60,000	SGD60,000
	Less cost
	Brokerage	SGD162.00	SGD240.00	SGD165.00
	Exchange Fees	-	SGD28.50	SGD28.50
	GST	-	SGD18.80	SGD13.55
	Financing Costs (30 Days)	SGD205.48	SGD150.00	-
	Net sales proceeds	SGD59,632.52	SGD59,562.71	SGD59,792.96
Net Profit/Loss		SGD9,497.52	SGD9,323.29	SGD9,620.42
Return		189%	47%	19

Losses are magnified with higher leverage:

Action	Item	CFD	Margin	Cash
Buy	Share	10,000	10,000	10,000
	Buy Price	SGD5.00	SGD5.00	SGD5.00
	Contract Value	SGD50,000	SGD50,000	SGD50,000
	Cash Outlay	SGD5,000	SGD20,000	SGD50,000
	Gearing	10 times	2.5 times	Nil
	Add cost
	Brokerage	SGD135.00	SGD200.00	SGD137.50
	Exchange Fees	-	SGD23.75	SGD23.75
	GST	-	SGD15.66	SGD11.29
	Net Purchase Value	SGD50,135.00	SGD50,239.41	SGD50,172.54
Sell	Sell Price	SGD4.00	SGD4.00	SGD4.00
	Contract Value	SGD40,000	SGD40,000	SGD40,000
	Less cost
	Brokerage	SGD108.00	SGD160.00	SGD110.00
	Exchange Fees	-	SGD19.00	SGD19.00
	GST	-	SGD12.53	SGD9.03
	Financing Costs (30 Days)	SGD205.48	SGD150.00	-
	Net sales proceeds	SGD39,686.52	SGD39,658.47	SGD39,861.97
Net Profit/Loss		SGD10,448.48	-SGD10,580.94	-SGD10,310.57
Return		-208%	-53%	-21%

What is an example of a profitable trade and a loss-making trade on a margined account?

Peter deposits SGD3,000 into his account and buys SGD30,000 of Stock A that is margined at 10%.

A Profitable Trade
Stock A moves up by 5 cents, and Peter makes a profit of SGD500. His portfolio will show a balance of SGD3,500, which means he can now leverage up to SGD35,000.

A Loss-Making Trade
On the flip side, if the trade moves against him, the losses he incurs are deducted immediately from his SGD3,000 deposit. If Stock A moves down by 5 cents and Peter loses SGD500, his account will reflect SGD2,500.

Because SGD2,500 is insufficient to support his open initial position worth SGD30,000, there will be a margin call on his account at the end of the trading day.

He has 2 choices:

Top up his account with SGD500 to maintain the SGD3,000 needed to support his SGD30,000 open initial position; or
Sell a few lots so that the trade value of his open position is only SGD2,500. This closes the position partially to reduce his exposure on the trade.

All profits and losses are reflected 'live' in your account. Hence, you can manage your risk better.

Trading Example - Profitable Short Trade

Short Stock A		Remarks
Sell Quantity	10,000	-
Price	SGD3.70	-
Opening Contract Value	SGD37,000	Sell 10,000 shares as a CFD at SGD3.70 (SGD3.70 10,000 shares)
Opening Contract Value	Initial Margin (10%)	SGD37,000 10%
Commission (0.25%)	SGD37,000	SGD37,000 0.25%
Total Margin Required	SGD3,792.5	Initial Margin Commission
Close Short Position		Notes
Buy Quantity	10,000	-
Price	SGD3.50	-
Closing Contract Value	SGD35,000	Sell 10,000 shares as a CFD at SGD3.70 (SGD3.70 10,000 shares)
Variation Margin / Profit or Loss	SGD2,000	SGD37,000 - SGD35,000
Commission (0.25%)	SGD87.50	SGD35,000 0.25%
Finance Changes (10 days)	SGD40.54	SGD37,100 4.0% 365 10 days
Net Profit	SGD1,779.46	Profit on the trade - Commission on the open & close of the trade - Financing
Return on investment	46.9%	-

Trading Example - Loss-Making Short Trade

Short Stock A		Remarks
Sell Quantity	10,000	-
Price	SGD3.71	-
Opening Contract Value	SGD37,100	Sell 10,000 shares as a CFD at SGD3.70 (SGD3.71 10,000 shares)
Opening Contract Value	Initial Margin (10%)	SGD37,100 10%
Commission (0.25%)	SGD37,100	SGD37,100 0.25%
Total Margin Required	SGD3,802.75	Initial Margin Commission
Close Short Position		Notes
Buy Quantity	10,000	-
Price	SGD3.91	-
Closing Contract Value	SGD39,100	Sell 10,000 shares as a CFD at SGD3.91 (SGD3.91 10,000 shares)
Variation Margin / Profit or Loss	-SGD2,000	SGD37,100 - SGD39,100
Commission (0.25%)	SGD97.75	SGD39,100 0.25%
Finance Changes (10 days)	SGD40.66	SGD37,100 4.0% 365 10 days
Net Loss	-SGD2,231.16	Net Loss + Commission on the open & close of the trade + Financing
Return on investment	-58.6%	-

Contract for Difference