Clients will be subjected to Rules-based margin and Portfolio Margin requirement in using our US securities trading service.

Under Portfolio Margin, trading accounts are broken into three component groups: 1) Class groups, which are all positions with the same underlying.; 2) Product groups, which are closely related classes; and 3) Portfolio groups, which are closely related products. Examples of classes would include IBM, SPX, and OEX. A product example would be a Broad Based Index composed of SPX, OEX, etc. A portfolio could include such products as Broad Based Indices, Growth Indices, Small Cap Indices.

The portfolio margin calculation begins at the lowest level, the class. All positions with the same class are grouped and stressed with a series of specific parameters (whereby underlying prices and implied volatility will be changed). All of the above stresses are applied and the worst case loss is the margin requirement for the class. Then standard correlations between classes within a Product are applied as offsets (For example, within Broad Based Index product 90% offset is allowed between SPX and OEX). Thereafter standard correlations between Products are applied as offsets. After all the offsets are taken into account all the worst case losses are combined and this number is the margin requirement for the account.  The real-time, intra-day margining system applies the Day Trading Margin Rules to Portfolio Margin accounts based on real-time equity.

Margin requirement is calculated by computer algorithm model that takes into consideration of a series of factors including but not limited to underlying price, implied volatility, asset liquidity, portfolio composition and equity positions in your margin account. Due to the complexity of Portfolio Margin calculations, it would be extremely difficult to calculate margin requirements manually.

Initial and maintenance margin requirements are available within the Account Window of the Trading Platform or the Margin Report available in Account Management. Clients should keep close monitoring of the equity level and the maintenance margin requirement at all time. We highly recommend our client to keep a margin buffer higher than the maintenance margin requirement as possible, so as to tackle with the increase of margin requirement due to sudden surge of above factors that may trigger forced liquidation automatically without prior notice to the client.