Financing purchase:

Financing purchase means that investors use funds or securities as pledges to borrow funds from securities companies to buy stocks. Customers pledge their net assets (such as cash, stocks, futures, long options, etc.) to IB and finance according to a certain proportion. They can finance both the main currency and other currencies.

Notes on securities lending and selling:

1. IB cannot "partially finance". For example, if the net asset is US$10,000, it cannot pledge only US$5,000 and raise US$5,000. It must be: financing can only be started after all the principal has been consumed. Just use financing to buy and trade directly, no need to activate it. For example, if the principal is 10,000 US dollars and the financing is 10,000 US dollars, you can directly buy stocks worth 20,000 US dollars (pay attention to the risk of forced liquidation).

2. The intraday leverage of different U.S. stocks is generally 3-4 times (including principal), and Hong Kong stocks are generally about 3.2 times; the leverage must be reduced to 2 times at 15:50 Eastern Time to ensure SMA ( Overnight risk control value) is greater than 0, otherwise it may trigger forced liquidation at the next opening.

Extended information:

Risks of buying stocks with margin financing

The margin trading business has a certain leverage structure, and the profits and losses will expand accordingly. When the losses reach a certain level, There is a risk of forced liquidation, so the risk of margin trading is greater than that of general securities trading. Investors engaged in margin trading must fully understand their risk tolerance and not only have the concept of doubling profits, but also the concept of greater losses.

The threshold for investors to enter margin trading is relatively high, with account opening time exceeding 6 months and assets exceeding 500,000 yuan. In fact, there are still many risks in financing stock trading. In addition to the risks inherent in the stock market, the financing behavior itself is also risky, because financing requires interest, and this interest needs to be paid regardless of whether you make a profit or a loss.