What are the Transaction Rules of Margin Trading Account?
Free Margin Trading(VCFC) / Murabaha(VCFC)
- Non-red color stocks: VCFC can provide margin purchasing power to customers for buying stocks. (VCFC may specify that certain non-red color stocks are not eligible for margin financing; trading rules for such stocks are the same as for red color stocks.)
- Red color stocks: Customers use their own cash purchasing power to buy stocks; VCFC does not provide additional margin purchasing power.
- Both "Red color" and "Non-red color" stocks can be referred to on the official exchange website, but Sahm also maintains its own 'marginable list' which outlines the stocks eligible for margin trading within Sahm.
Example: Cash tied up by non-marginable stocks will double reduce the purchasing power of marginable stocks:
If a user has $100,000 cash, upon activating margin trading, they have an available credit of $100,000 and purchasing power of $200,000. For Stock A with a margin ratio of 100% and not eligible for pledging. Buying $30,000 worth of Stock A leaves $70,000 cash remaining. The financed amount is $100,000, with usable financing amount of $70,000, resulting in a purchasing power of $140,000. (If non-marginable stocks are bought first, these funds cannot be used for collateral, resulting in a financed amount of $70,000).