The concept of margin trading is relatively complex overall. As a financial person who has worked for a leading securities firm for a long time, I have been exposed to this area a lot, so I also take this opportunity to share it for reference for learning and exchange:
1, What is margin trading
As the name suggests, simply speaking, financing means borrowing money from a securities firm to buy stocks, and securities lending means borrowing stocks from a securities firm and selling them to earn the price difference. The margin trading account is an account independently derived from the ordinary A-share account.
2. Conditions for opening margin trading and securities lending
To open margin trading and securities lending, you need to have half a year of trading experience in an ordinary account and average daily assets of 500,000 in the account on the 20th before you can apply.
3, margin trading and securities lending activation method
As long as you are a securities firm that supports margin financing business, you can directly go to the sales department to apply after meeting the conditions. Of course, there are now very few securities companies that can provide several processing methods at the same time. There are many choices and it is convenient and fast. It is recommended that investors ask clearly before processing and choose the best among the comprehensive processing methods.
4, two-financing interest rate
The current official default interest rate for financing is 8.35%, and a few can be flexibly adjusted to a minimum of 5%. The official rate for securities lending is between 6% and 10%, and a few special bonds start at 2.99%. Generally, Adjustment is not supported. The default commission fee is RMB 25,000, with a minimum of RMB 10,000. Only a few brokers can meet this requirement at the same time. For investors, the lower the interest rate commission, the greater the cost savings. I also counted the latest discounts of 48 major listed securities companies across the country, and drew conclusions for learning, communication and reference (as shown below):
The data comes from various securities companies. The above discounts can be met at the same securities company. For reference
5, Things to note when handling the two financings
1. Before applying, you must ask clearly what the interest rate is, whether it is 5% or more, whether it is a permanent interest rate or an active interest rate, and only handle it if you are satisfied.
2. Ask what the processing methods are. Currently, there are very few securities companies that can support several processing methods at the same time. After asking in advance, you can choose the best one according to your own situation.
3. If the demand for securities lending is high, you should also ask about the source of securities in advance. Even if you do not use it, you must have it. At present, the source of securities is mainly concentrated in the top-ranked leading securities firms, usually between 400-800.
