Margin

Increase your purchasing power via MakeTrade Margin.

MakeTrade Margin offers a flexible credit line to clients to purchase any stocks listed in the Philippine Stock Market (PSE). You can trade by borrowing funds from Maybank ATR Kim Eng at a certain interest rate. Think of it as a loan extended by us for our customers to take advantage of market opportunities using long-term stocks as collateral.

We have competitive interest rates versus other brokers. It starts at 0.99% per month, computed based on daily Margin Utilization. Financing from our margin product may be up to 0.5x the amount of collateral.

How Margin Financing Works
 
To understand the main benefit of trading via Margin Financing, let’s have an example.  Suppose you have Php 100,000 in actual cash, and your collateral can provide you Php 50,000 of margin line.
 
In a Normal Trade:
Day 1: You purchase 100,000 shares of Stock A at Php 1.00
Day 5: You sold 100,000 shares of Stock A at Php 1.20
Gross Gain: Php P20,000
 
In a Trade Funded by the Margin, you’re able to buy 50% more
Day 1: You purchase 150,000 shares of Stock A at Php 1.00
Day 5: You sold 150,000 shares of Stock A at Php 1.20
Gross Gain: Php P30,000
 
By taking advantage of the MakeTrade Margin, you’re able to gain 50% more than at a normal trade. Plus, you would need to pay only for the 5 days’ worth of interest when it has been utilized. 
 

The MakeTrade Margin Facility – How does it work?

The total amount you can purchase stocks on margin is 50% of the value of marginable securities in your portfolio.
 
For example, Stocks A, B and C are all included in our list of marginable securities, while Stock D is not included. In this case, you may purchase up to P800,000.00 worth of stocks on margin.
           Stock          Marginable Market Value
A Yes 500,000
B Yes 350,000
C Yes 750,000
D No 250,000
Portfolio Value 1,850,000
Collateral Value [A+B+C] 1,600,000
Margin Line: Collateral Value x 50% 800,000
 

Benefits of the MakeTrade Margin
  • Leverage on your portfolio –MakeTrade Margin allows you to increase your buying power by borrowing against your portfolio and using stocks held as collateral.
  • Portfolio diversification – Having the ability to borrow against your long-term investments gives you access to more funds that you can use for short-term trading.
  • Trading flexibility – Having a steady line of credit enables you to ride short-term market movements and take advantage of market opportunities.
  • Low borrowing costs – With monthly interest rates starting at 0.99% per month (13.31% per year including EVAT), you can potentially make higher profits with minimal costs.

Margin Calls
 
In a moving market, prices can fall quickly. If the equity (value of securities minus what you owe the brokerage) in your account falls below the maintenance margin, the brokerage will issue a "margin call". Your options in this situation are:
 
1. Inject additional cash so that the excess loan balance is paid off
2. Lodge additional marginable stocks to increase the loan limit
3. Sell part of your non-marginable stock holdings and use the proceeds to repay part of the loan
 
If for any reason you do not meet a margin call, the brokerage has the right to sell your securities to increase your account equity until you meet the maintenance margin requirement. You will be informed via email if you’re in margin call.
 
Below is a summary of the different maintenance margin ratios and actions to be taken if they are breached:
 
  Margin Ratio Notice Period
 
Margin Alert
Less than 200% but at least 175% Has 5 business days to bring up the margin ratio to at least 200%.
 
Margin Call
Less than 175% but at least 150% Has 24 hours to bring up the margin ratio to at least 200%.
 
Margin Suspension
 
Less than 150%
The account will be automatically suspended for trading. 
 
What is a Margin Suspension?
 
When your Margin Ratio falls below 150%, your MakeTrade trading capability will be suspended. Selling of securities should be done within the day via Broker-Aided.
 
Please call our hotline at 625-5888 when you’re on a Margin Suspension.
 
Trading activities may resume as soon as your Margin Ratio is brought back to 200%.
 
How are interest charges computed?
 
MakeTrade offers competitive interest rates vs. other brokers; it starts at 0.99% per month. Margin Interest is computed by Margin Utilization multiplied by the Monthly Interest Rate divided by 30 days plus 12% EVAT. This accrues daily and are billed and debited from account every 24th of the month.
 
Formula for Daily Interest:
 
Interest charge = (Daily Margin Utilization x (Monthly Interest Rate/30)) + 12% VAT
 
MakeTrade Margin Account vs. Cash Account
 
A Cash Account requires all purchases of stocks to be paid in full. You can miss out on an opportunity if cash is not readily available. The MakeTrade Margin Account, on the other hand, will provide you a flexible credit facility to always have cash on hand. We also give you lowest possible interest rate on any utilized margin. Moreover, you can keep your loan as long as you want—provided that you fulfill interest obligations and maintenance requirements.

What should I know before using margin?
 
Trading on margin simply means purchasing stocks using borrowed funds; thus incurs more risks than cash trading. This loan secured by your portfolio as collateral must be repaid with the accrued interest anytime you want.
 
It is important that you fully understand the concepts, rules & requirements and risks involved in trading stocks on margin.
 
  • Margin investing is not for everyone as it increases your level of market risk.
  • All the marginable stocks in your portfolio are held as collateral for your margin loan. Although, you can still sell your stocks held as collateral as long as your utilized margin is still above the maintenance margin required.
  • You must repay Maybank ATR Kim Eng the amount of money you borrowed on margin regardless of the underlying value of the stocks you purchased. The borrowed amount will not change despite the fluctuations of your portfolio value.
  • Interest will be accrued on your margin loan depending on the daily amount borrowed and will be deducted from your account every 24th of the month. Interest rate is based on the utilized amount computed on a per day basis.  Lower interest rate may be awarded clients with higher loan utilization.
A maintenance margin requirement must be observed. Margin accounts are required to maintain a margin ratio of at least 200%--collateral value should at least be double the loan amount.

List of Marginable Securities
No. Ticker Security Name No. Ticker Security Name
1 AC AYALA CORP 25 MBT METROBANK
2 AEV ABOITIZ EQUITY 26 MEG MEGAWORLD
3 AGI ALLIANCE GLOBAL 27 MER MERALCO
4 ALI AYALA LAND 28 MPI METRO PAC INV
5 AP ABOITIZ POWER 29 MWC MANILA WATER
6 BDO BDO UNIBANK 30 PCOR PETRON
7 BEL BELLE CORP 31 PF PUREFOODS
8 BPI BANK PH ISLANDS 32 PGOLD PUREGOLD
9 CEB CEBU AIR 33 PLC PREMIUM LEISURE
10 CHIB CHINABANK 34 PNB PHIL NATL BANK
11 CNPF CENTURY FOOD 35 PX PX MINING
12 COSCO COSCO CAPITAL 36 RCB RCBC
13 DD DOUBLEDRAGON 37 RLC ROBINSONS LAND
14 DMC DMCI HLDG 38 RRHI ROBINSONS RTL
15 DNL DNL INDUS 39 SCC SEMIRARA MINING
16 EMP EMPERADOR 40 SECB SECURITY BANK
17 FGEN FIRST GEN 41 SHLPH PILIPINAS SHELL
18 FLI FILINVEST LAND 42 SM SM INVESTMENTS
19 GLO GLOBE TELECOM 43 SMC SAN MIGUEL CORP
20 GTCAP GT CAPITAL 44 SMPH SM PRIME HLDG
21 ICT INTL CONTAINER 45 TEL PLDT
22 JFC JOLLIBEE 46 UBP UNION BANK
23 JGS JG SUMMIT 47 URC UNIV ROBINA
24 LTG LT GROUP 48 VLL VISTA LAND
 
Margin Ratio
 
Margin Ratio is computed as Collateral Value / Margin Utilization Amount. Your Margin Ratio is computed every end of day, and is included in the Customer Daily Margin Report which will be emailed to you every day. Each margin account is required to maintain a margin ratio of at least 200%--collateral value should at least be double the loan amount.
 
How do I monitor my buying power?
A Customer Daily Margin Report will be emailed every end of day to show how the buying power in your trading platform is computed as well as pertinent details on your margin account.
 
Buying Power is the total of your actual cash balance and unutilized margin. The margin line is used [Margin Utilization] only when cash has been depleted. Conversely, any selling transaction proceeds will first be applied to pay off any availed margin balance before it is applied to the actual cash balance.
 
How do I open a Margin Account?
  • You must have an existing MakeTrade account with a minimum portfolio value of PHP250,000
  • Send your email of intent to open a MakeTrade Margin account to support@maketrade.com.ph.
  • Expect a call/email from MakeTrade to confirm receipt of request and if there are further requirements needed.
  • Sign three (3) Copies of the margin agreement, which will be provided to you by the MakeTrade representative.
  • Account set-up and approval may take up to 5 working days. 
Who are eligible to open a MakeTrade Margin Account?
  • Existing and new MakeTrade account holders with a minimum portfolio value of PHP250,000 may apply for margin.
  • Must have at least three (3) marginable securities as collateral
  • All applications will be subject to internal credit assessment and evaluation.
  • Employees and Agents of the Maybank ATR Kim Eng Group are not eligible to avail of this product.

Definition of Terms
 
Cash Account
The basic MakeTrade account where all buying transactions are paid for in cash.
 
Margin Account
A type of account which allows the customer to borrow funds from Maybank ATR Kim Eng against their marginable securities to purchase additional stocks in the market.
 
Margin Line
The amount the customer can borrow from Maybank ATR Kim Eng considering the collateral value and margin limit awarded. Margin Line is computed as 50% of the portfolio’s collateral value [in compliance to SRC 48.1] OR the Margin Limit assigned, whichever is lower.
 
Buying Power
The maximum value or amount available to make new purchases of non-marginable stocks. Buying power is equal to Cash available plus Unutilized Margin Line.
 
Margin Alert
An email notification sent to the customer advising them that their margin ratio fell to between 200% and 175%. Customer has 5 business days to bring up the margin ratio to at least 200%.
  
Margin Call
An email notification sent to the customer advising them that their margin ratio fell to between 175% and 150%. Customer has 24 hours to bring up the margin ratio to at least 200%.
 
Margin Suspension
 An email notification sent to the customer advising them that their equity percentage has fallen below 150% and that their margin account has been suspended. Customer has 24 hours to bring up the margin ratio to at least 200%.
  
Margin Loan or Margin Utilization
Total amount of borrowed funds
 
Marginable Securities
Stocks which are used as collateral for additional buying power
 
Non-marginable Securities
Stocks which are not eligible to be used as collateral
 
Total Collateral Value
The total market value of all marginable securities