Services and Tariffs

Marginal Trading (MICEX)

Marginal trading (or торговля с плечом) means:

• Customer's purchase of securities for assets borrowed from Broker;
• Customer's sale of securities borrowed from Broker

Broker credits Customer for some interest rate on the security of monetary assets/securities which are on the broker's account of the Investor. Meanwhile the Investor may continue to perform operations with mortgaged securities and monetary assets.

To provide for the recurrency the Broker according to FCSM requirements follows special rules which forbid to credit the Customer more than 100% of own Customer's assets (Customer's assets mean monetary assets and securities on Customer's account). Thus, the Customer is capable to buy shares for 200 rubles if he has got 100 rubles on his account (maximum margin 1:2). From the other hand, FCSM has formulated a special ratio between borrowed and own assets of the Customer, when this ratio is achieved the Broker must forcibly close the Customer's position and return loaned assets. This happens very seldom, for example, in case of sudden heavy fall of prices for shares.

According to FCSM requirements the Broker must calculate the Margin Level (ML):

MAC — Monetary Assets of the Customer
OS — Own Securities, evaluated on the latest transaction price
CD — monetary evaluation of the Customer's debts (if the Customer has borrowed securities, then it is the price of these securities on the latest transaction price)
Broker is not authorized to strike bargains for the sake of Customer if ML is lower than 50%.

For example:
The Customer has got 1 bln. RU on his account and he buys RAO UES of Russia shares for 2 bln. RU. So CD = 1 bln. RU.

The Broker must forcibly close the Customer's position when GV (Guarantee Value) <GV = (MAC+OS)*(1-DISCOUNT/100%)> becomes less than CD (Customer's Debts). On default the DISCOUNT value is set as 25%. So when the Customer's debts achieve 75% of his assets, the Broker must forcibly close the Customer's position.

For a example:
The Customer has got 1 bln. RU on his account and he buys RAO UES of Russia shares for 2 bln. RU. (200,000 shares per 10 RU.). In some time the price of RAO UES of Russia shares falls to X RU. per share and the Broker forcible sells all shares. Let's calculate X:

0,75*200 000*X=1 bln. ==> X=6,66 RU.

So, the Broker is forced to close the Customer's position at the decrease of the share price by 33% as compared with its initial price.

In practice, forced closing of positions occurs very seldom.

ML evoking forced closing is:

List of securities authorized by FCSM for marginal trading (Given in Tariffs).