Many people want to find out the conditions of short positions in margin financing and securities lending, which need to be solved by consulting relevant information. According to years of learning experience, solving the conditions of short positions in margin trading and securities lending can make you get twice the result with half the effort. Here, we share the experience of short positions in margin financing and securities lending for your reference.

Short position of margin financing and securities lending

In margin trading, the conditions for short positions in margin trading are as follows:

1. The net selling price (cash coupon) of the securities lender reaches a certain proportion of the securities deposit. At present, the margin ratio of securities companies is generally 100%, and some securities companies set it as 80% and 150%.

2. Investors bear the increase in margin interest rate. General securities companies charge the exchange an interest rate of 2.5 ‰, which is charged when they are profitable, and charged at a floating interest rate when there is a risk of liquidation.

3. The investor's credit account is insufficient, which is lower than the lower limit of the current guarantee ratio. The calculation formula is: current maintenance guarantee ratio = (market value of collateral+margin for margin financing and securities lending)/margin financing and securities lending debt.

4. The investor fails to make up the collateral within the agreed time limit.

5. ETF-linked funds tracking the underlying index fell unilaterally.

6. Forced liquidation. When the value of the investor's collateral is lower than the lower limit of the guarantee ratio, and there is no supplementary collateral, or the overdraft value cannot be compensated after compulsory liquidation, compulsory liquidation will occur.

What is the proportion of real-time financing guarantee?

When the real-time guarantee ratio of financing is 1.5 times, that is, the guarantee ratio is 150%, it is broken.

The guarantee ratio refers to the ratio between the collateral (such as stocks, futures contracts or government bonds) mortgaged by customers and the borrowed funds. This ratio is limited. When the guarantee ratio exceeds 200%, it means that if the customer borrows money again, it may lead to short positions.

What about the financing explosion?

The following measures should be taken in case of explosive growth of financing:

1. Make up the deposit. If you can contact the fund service provider as soon as possible to explain the situation, the fund service provider will help traders apply to the exchange to provide corresponding certificates, update the margin and avoid short positions. If you miss the opportunity to make up the deposit, the money in the account will be insufficient and the account will be leveled.

2. If the reason for the short position is the heavy position operation, then you should plan your position reasonably, don't operate too much at one time, and don't use all the financing amount for operation.

3. If you are closed by the brokerage firm, you will have to bear the cost of reopening the account in addition to losing the deposit of previous financing.

Therefore, in the operation of margin financing and securities lending, we must plan our positions reasonably, don't operate too much at one time, and don't use all the financing quotas for operation. At the same time, be sure to make up the deposit within the specified time.

What are the conditions for the outbreak of margin financing and securities lending?

Securitiesmargintrading, also known as "securities credit transaction" or margin trading, refers to the behavior that investors provide collateral to securities companies qualified for margin trading, borrow funds to buy securities (margin trading) or borrow securities and sell them (margin trading).

Compared with ordinary securities trading, margin trading has the following differences:

1. Investors engaged in margin trading must use ordinary securities accounts as credit accounts, and must have collateral, which should meet the standards set by the stock exchange.

2. Investors engaged in margin trading, the margin ratio shall not be less than 100%.

3. The investor shall deliver the collateral to the securities company in the agreed way, and the securities company shall ensure that the collateral delivered by it is consistent with the certificate issued by it.

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Who do you borrow shares from for securities lending?

Securities lending is trading by the shares of securities companies, so the borrowers of securities lending are generally securities companies.

This is the end of the introduction of the article.