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Share Borrowing Account

Share Borrowing Account

Lets you borrow shares real-time and online for immediate covered short-selling. Minimum borrowing quantity is just 1 board lot of the share! With SBA, you can now engage in covered short selling, arbitrage, hedging or other trading views.

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Benefits

	SBA allows you to potentially profit from the down market by borrowing shares to short sell in the bear market.

	Alternatively, you may devise hedging techniques for your portfolio against any adverse price movement.

How Share Borrowing works

If you place a collateral amount of $5,000, the computations of the value of shares that you can borrow are:

	Collateral	Available Value for Borrowing	Number of times of collateral	Limit % of account (Maintenance limit)
1^st Transaction	$5,000	$10,000	2 Times	150%
Subsequent Transactions	$5,000	$10,000	2 Times	150%

From the above table, we can see that the available value for Borrowing is always 2 times the value of collateral pledge, and the initial limit maintained is always 150%.

Limit % = Total Market Value of Collateral (i.e cash/securities) X 100

Market Value of Shares Borrowed

Limit % = $5000 (cash) + $10,000 (value of borrowed stock not sold) X 100
$10,000

=150%

How do I meet my limit call

According to the Terms of the SBL account, if your limit level is greater than 130% but lower than 140%, your account would be subject to limit call. To meet your limit call, you can either deposit additional cash, acceptable securities or buy back your borrowed shares and return them to meet any limit call. You have two days to comply with the limit call.

If your limit falls below 130%, it is mandatory in the Terms of the SBL account that part or all of the shares borrowed may be forced buy-back by the company to bring your limit to at least 150%. Also, your collateral (if it is not cash) may be forced sold to meet limit requirement.