Enhance your investment journey with margin trading
- Intraday leverage of up to 4 times and overnight leverage of up to 2 times.
- Enjoy 4.8% p.a on USD margin financing rates for all amounts.*
What is margin trading?
Pros
- Increased purchasing power - Margin facilities allow you to borrow money in 8 different currencies, and therefore allow you to purchase more securities compared to a cash account.
- Potential higher returns - Margins allow you to purchase more securities than you otherwise could. Potentially earn higher returns if those securities gain value as you now hold on to more units of securities.
Cons
- Higher Risk - There’s no guarantee that an investment will succeed as market can be unpredictable. A decline in the value of securities that are purchased on margins may require you to top up additional funds to avoid the forced sale of those securities or other securities in your account. In some cases, you could wind up losing more money than was put into your portfolio.
Why trade with margins?
Increased purchasing power and potential higher returns
Scenario 1: Trade with Cash
Assume you invest S$12,000 cash into a share at S$1.00 per share. If you sold all the shares at S$1.20, you would receive S$14,400. Your gross gain would be S$2,400*.
Your gross return in this scenario would be 20%
Scenario 2: Trade with Margins
Assume you invest S$12,000 cash into a share at S$1.00 per share with long initial margin of 30%. You would be able to purchase 40,000 shares. If you sold all the shares at S$1.20, your gross gain would be S$8,000*.
Your gross return in this scenario would be 66.67%
However, you may experience higher losses with leverage
Scenario 1: Trade with Cash
Assume you invest S$12,000 cash into a share at S$1.00 per share. If you sold all the shares at S$0.80, you would receive S$ 9,600. Your gross loss would be S$2,400*.
Your gross return in this scenario would be -20%
Scenario 2: Trade with Margins
Assume you invest S$12,000 cash into a share at S$1.00 per share with long initial margin of 30%. You would be able to purchase 40,000 shares. If you sold all the shares at S$0.80, your gross loss would be S$8,000*.
Your gross return in this scenario would be -66.67%
* Returns shown here are for illustration purposes only. Returns may vary and do not take into consideration any transaction/trading and margin financing costs.
Financing Interest Rates
Click HERE to check out the margin financing rate for all available currencies.
For more details on margin and leverage, you may visit our website HERE.
Disclaimer
*Please note that the interest rate shown here are subject to daily fluctuation consistent with the market interest rate. Customers should check the rates on our website regularly for the daily rates. Rates are calculated daily, and the accumulated monthly interest amount is debited from your trading account on the 4th working day of each month. You may refer to your statement for details of your account balance.
This advertisement has not been reviewed by the Monetary Authority of Singapore.