For funds that guarantee the performance of futures trading obligations, futures traders shall deposit the margin into the margin account of the futures company before trading. In the general securities market, in addition to cash transactions, customers must also pay all the value of their investment securities in cash.
There is also a credit transaction, in which customers can buy and sell securities that exceed the margin value in the securities market only by paying a margin as an investment commitment. This kind of transaction is called margin trading.
In order to ensure the security and fairness of the transaction, the deposits of both parties will be frozen when the information is released or the transaction is reached. Only when the deposit is paid, when the other party breaches the contract, the injured party will get compensation.
Extended data:
Margin accounts are divided into credit overdraft, mortgage overdraft and interbank overdraft.
1. Credit overdraft means that the bank signs an overdraft contract with the depositor to determine the overdraft limit, term and overdraft interest rate, and the bank gives the depositor the right to overdraw according to the overdraft contract.
2. Mortgage overdraft means that when depositors overdraw the bank, they must sign a mortgage overdraft contract with property (such as family property or securities) as collateral.
3. Inter-bank overdraft is a form of mutual financing between banks. Overdraft lending has promoted the expansion of capitalist credit and intensified market speculation. Once there is a credit crisis or a banking crisis, a chain reaction will occur, leading to chaos in the monetary and financial markets.
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