Open Margin Account
WHAT IS A MARGIN ACCOUNT?
A Margin Account allows you to borrow cash from CBFS to purchase securities. The loan in the account is collateralized by the securities you purchase. If the value of the stock drops sufficiently, the account holder will be required to deposit more cash or sell a portion of the securities.
ADVANTAGES OF MARGIN ACCOUNT
Increased returns – The most significant advantage of using margin is the ability to leverage your investments and increase returns when the price of your holdings move in your favor. You can hold position until necessary, CBFS will not liquidate your positions in 7 days.
Competitive Interest Rates – CBFS provides a 0% interest rate for the first month. After that, a service fee will apply on the financed amount, calculated at the QCB lending rate plus up to 2% per annum. This rate is subject to adjustment by the company, with customer and QFMA approval. Importantly, if you do not utilize the margin amount provided by CBFS, no interest will be charged. Terms & Conditions apply.
More Purchasing Power – Being able to invest more while having limited cash on hand allows you to take advantage of timely market opportunities. Get QR 1 for every QR 1 brought into the margin account.
Increased cash dividends - An increase in current income from cash dividends bought with the margin.
RISKS OF MARGIN TRADING
Trading with Margin amplifies losses the same way as it amplifies gains. The biggest risk from buying on margin is that you can lose much more money than you initially invested. A loss of 50 percent or more from stocks that were half-funded using borrowed funds, equates to a loss of 100 percent or more, plus interest and commissions.
If the value of the stock drops significantly, the account holder will be required to deposit more cash or sell a portion of the securities.
SHAREHOLDER RIGHTS
The investor gets to enjoy all the rights related to the stocks bought on margin such as dividends, receive bonus shares & vote in General Assemblies
MORTGAGE OF SHARES
The funded shares cannot be mortgaged; however, the investor can sell the shares at any time through the electronic trading system.
PRE REQUISTES FOR OPENING A MARGIN ACCOUNT
- Must have an active trading account with Commercial Bank Financial Services
- Minimum initial deposit of QR 10,000 worth of shares or cash
SHARES ALLOWED FOR MARGIN TRADING 40 +
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