Margin Financing Related FAQs

Here you'll find quick answers to common questions about margin financing.

1. How is financing interest calculated?

The financing interest is calculated based on the actual amount of the account after delivery and settlement. The financing interest on that day = the financing balance after the closing on that trading day × (margin rate / 365), with a minimum of 0.01 per currency. If it is less than 0.01 per currency, no interest will be calculated.

If stocks are purchased using margin financing, cash arrears will be incurred. The actual time when the account incurs arrears will be calculated from the day the liquidation is completed. For example, in terms of Hong Kong stocks, the liquidation time is T+2, that is, interest begins to accrue on T+2 and is settled daily and monthly.

Note:

The margin rate may be adjusted periodically without prior notice to accommodate changes in currency exchange rates.
The margin financing is available 365 days per year, calculated on a natural day basis.

2. How is financing limit adjusted?

If you need to adjust the financing limit, you can go to Longbridge App > Assets > Financing Status to check whether the button for applying for adjusting the financing limit is displayed. If this button is displayed on the page, click to initiate an application for limit adjustment. If this button is not displayed, you can contact the exclusive customer service manager to apply (this application does not guarantee success).

Note: You can only apply twice for adjustment of the financing limit within 24 hours.

3. How is financing arrears repaid?

There are generally three methods to repay financing arrears:

If there is enough balance in other currencies to repay the financing arrears, you can use the currency exchange function to convert them into corresponding currencies to make up for the arrears.
Deposit: After you deposit, priority will be given to make up for the arrears. The part of arrears made up will no longer bear interest after the deposit is received.
Selling stocks: After selling stocks, for example, T+2 days are required to complete liquidation of Hong Kong stocks. Therefore, on the T day and T+1 day after selling stocks, the account still has arrears and generates financing interest, with a minimum of 0.01 per currency.

4. When is the repayment time for financing arrears?

The clearing time of Longbridge Securities US/Hong Kong stocks is 17:00 (Hong Kong time) every trading day.

Example (I)
- Assume that you use margin financing to purchase Hong Kong stocks on January 1 (Hong Kong time), and the STATEMENT DATE is January 1. The transaction amount (together with the relevant transaction fees) deposited by you before 17:00 on January 3 (Hong Kong time) will not generate financing interest.
Example (II)
- Assume that you use financing to purchase US stocks on January 1 (Hong Kong time), and the STATEMENT DATE is January 2. The transaction amount (together with the relevant transaction fees) deposited by youbefore 17:00 on January 3 (Hong Kong time) will not generate financing interest.

Disclosure

This article is for reference only and does not constitute any investment advice.