Margin trading facility
Interest charges will be applied to your account at prevailing interest levels, subject to the facilities used. Over time, your debt level increases as interest charges accrue against you. Accordingly, it is important to know that buying on margin should be used for short-term investments. When facilities continue for a longer time, you will need higher stock prices to break even.
The maximum amount that the client can buy at a certain time not withstanding the specified parameters. Let's assume that you deposit JD 10, in your margin account and you plan to buy stocks worth of JD 20, The JD 20, represent your buying power. If you buy JD 5, worth of stocks, you will have JD 15, remaining in buying power, i. This brings us to an important point: In volatile markets, stock prices can fall very quickly.
If the equity the proportion of your equity to market value in your account falls below the maintenance margin, Al Hekma will apply a "margin call". This is normally done without giving you any prior notice. Corporate members with a Net-worth of Rs.
Such eligible members are required to make a request to the Membership Dept. The request could be faxed on — with original request delivered to the Dept. The members are required to submit Net-worth certificate from their auditor in the prescribed format alongwith their application. Draft formats of the request letter along-with the format for Net-worth certificate are enclosed as Annexure- B.
The members can submit certificate confirming Net-worth as on September 30, or as on March 31, , while making the request. However, in case the members who have given Net-worth Certificate as on September 30, , they would be required to submit Net-worth Certificate as on March 31, latest by April 30, The securities forming part of Group I securities for computation of VaR Margins would be eligible for margin trading facility.
Currently, scrips are included in Group 1. A list of these securities where the Margin Trading is permitted during April is enclosed as Annexure- C. A list of eligible securities would be periodically announced by the Exchange at the end of the month, which would be effective from the first date of the ensuing month.
The members are required to report Margin Trades latest by The members may please note the following:. The members are required to report only the Margin Trades position where the transactions have been executed on the Exchange.
The members would be required to report cumulative outstanding position of Margin Trading. The members are required to report the Margin Trade position in the DUS system on the next trading day only between 9: The members are required to place suitable internal systems to ensure that they are complying with the various SEBI stipulations relating to Maximum borrowing, total and single client exposure etc.
Based on the reporting done by the brokers to the Exchange, the Exchange would disclose the Margin Trade position across the market for all its members at the end of the day. The members providing facility of Margin Trading to their clients would be required to submit the following certificates:.
The Net- worth certificate should be submitted in the format enclosed as Annexure—B to the Membership Dept of the Exchange. The members are required to submit Net-worth certificate in the prescribed format confirming Net-worth as on 30 th September and 31 st March latest by 31 st October and 30 th April. Margin Trading Compliance Certificate: