margin trading is to borrow funds or borrow securities from sources for investors to use. It agrees on a certain contract period. It can also be extended after the debt is repaid at maturity, and the securities company charges corresponding interest.
is divided into two parts, financing and securities lending. The corresponding needs are different.
Financing needs
1. Add leverage buy stocks
Credit account transfers collateral (can be cash, stocks, bonds, funds) as a deposit, and funds are raised according to the securities company margin ratio , and the proceeds can be used to buy stocks .
2. To obtain short-term funds
, you can also obtain a financing limit by transferring part of the underlying securities, buy a certain amount of underlying securities in the credit account, and sell a corresponding amount of underlying securities in the ordinary account, keeping the total position unchanged, Get short-term funding .
3. Financing T0
Suppose that when there is a stock in the account: Longi Green Energy, but there is no funds to enter the position, if you want to take a position first and then choose an opportunity to sell it, you can use your own position of Longi Green as collateral and buy it through financing in the credit account Longi Green Energy stocks, and then sell the original bottom position at the appropriate time to repay, keeping the position unchanged to achieve intra-day reversal trading . And 's repayment on the same day will not incur financing interest.
Longi Green Energy
can also use this method to buy first and sell later to realize the conversion of 's holdings of stocks, which will also not generate financing liabilities.
Securities lending requirements
Securities lending also requires investors to transfer margin from their credit accounts, and obtain the securities lending quota according to the proportion of the securities lending margin. Securities lending is the only tool on the market that can short-sell stocks .
The main demand for securities lending is:
1. Securities lending short selling
After borrowing stocks from a securities company, you can sell the stocks if you judge that the stocks will fall. After waiting for the stocks to fall, you can buy the stocks to repay the bonds and obtain profits.
2. Quantitative hedging
buys strong stocks among 50ETF, 300ETF, and 500ETF, and sells ETFs of the same size through securities lending. Regardless of the market environment, you can obtain relatively stable absolute returns .
3. Offline new investment
Customers can hedge risks through financing purchases and securities lending to sell equal amounts of securities , increase the market value of positions, and meet the offline new investment threshold requirements.
4. Event arbitrage
GDR hedging arbitrage, futures hedging arbitrage, convertible bond hedging arbitrage
5. Intraday trading
Users can form hedging through "collateral buying" spot positions and "securities lending selling" corresponding stocks in the credit account. Then conduct intraday high-frequency trading on the spot position.
JAC intraday trading opportunities
Assuming that there are funds in the account but no bond source, you can use the margin collateral in the credit account to buy JAC Automobile, and at the same time sell securities company JAC Automobile bond source to form a hedge. Afterwards, the collateral spot position is reversed within the day to obtain stable T0 income, which is not affected by stock price fluctuations.
Among them, the scale of financing is much larger than the scale of securities lending. The object of financing is funds, and the funds in the market are relatively sufficient. The objects of securities lending are stocks or index ETFs and industry ETFs. The richness of securities sources of securities companies is generally related to the size of the securities company.
I am an old trader and now work at a securities firm. If you have any needs for margin trading, you can contact me via private message.
