Q & A
Q & A
Margin financing
Buying on margin refers to the practice of buying securities where clients pay only certain percentage of the securities’ value and borrow the rest from CNI. Margin has the function of Leverage. Assume the client is using 1X Leverage, if the stock price increase 25 % at the same time the margin value will increase 50%, however, as the stock price reduce 25%, the margin value will also reduce 50%, therefore, we will recommend client with better risk manage ability to use margin trading.
In general, clients have to complete depositing cash / Mortgageable securities or sell part of the securities in one trading day. In some special situation which the market is volatile, clients have to deposit cash or sell securities in a short period of time; otherwise we reserve the right to sell the clients' securities without notice.