Should I borrow to trade? What is margin trading?
Should I borrow to trade? What is margin trading?
How much can investors borrow? How is margin interest calculated?
Key takeaways：
主要收获：
Trading on margin means you are investing in stocks with borrowed money.
Margin trading is very risky - it amplifies both gains and losses.
How much can investors borrow? How is margin interest calculated?
保证金交易意味着你用借来的钱投资股票。
融资融券风险很大--它既放大了收益，也放大了损失。
投资者能借到多少钱？保证金利息是如何计算的？
What is margin?
什么是保证金？
Trading stocks on margin seems like a great way to make money. If you have a few thousand dollars in your account, you might qualify to borrow money against your existing stocks at a low-interest rate. You can use that borrowed cash to buy even more stock.
保证金交易股票似乎是一种很好的赚钱方式。如果你的账户里有几千美元，你可能有资格以现有股票为抵押以低息借钱。你可以用借来的现金买更多的股票。
In theory, this could leverage your returns.
从理论上讲，这可能会影响你的回报。
Before investing, you must know the RISK!
在投资之前，你必须知道风险！
The reality: Margin trading is an inherently risky strategy.
现实情况：保证金交易是一种固有的高风险策略。
It allows aggressive traders—both individuals and institutions—to buy more shares than they could otherwise afford. When things go according to plan, these investors make a lot of money. When things go south, it can get really ugly, really quickly.
它允许激进的交易者-无论是个人还是机构-购买比他们原本负担得起的更多的股票。当事情按计划进行时，这些投资者赚得盆满钵满。当事情变得糟糕时，它可能会变得非常丑陋，很快就会变得非常丑陋。
How does margin trading work?
融资融券交易是如何运作的？
To explain in a simple way, we assume there are no interest costs in margin trading, which is the opposite in reality.
简单地说，我们假设融资融券不存在利息成本，而现实中恰恰相反。
Imagine you have $500 in the trading account, which is your maximum buying power. However, to buy 10 shares of company A (each share is worth $100), you need $1,000 in total.
假设你的交易账户里有500美元，这是你最大的购买力。然而，要购买A公司的10股股票(每股价值100美元)，你总共需要1000美元。
With margin trading available, you can fund half the purchase price with your own money and buy the other half on margin.
有了保证金交易，你可以用自己的钱支付一半的购买价格，然后以保证金的方式购买另一半。
Good scenario:
好场景：
One year later, the share price rises to $200. You can sell the shares for $2,000 and pay back the broker the $500 borrowed for the initial purchase. Ultimately, you triple your money, making $1,500 on a $500 investment.
一年后，股价涨至200美元。你可以以2000美元的价格出售股票，然后偿还经纪人最初购买时借来的500美元。最终，你的钱翻了两番，500美元的投资赚了1500美元。
Bad scenario:
最糟糕的情况：
After a year, if the share price falls by half to $50, you sell at a loss and receive $500. Since this equals the margin amount, you lose 100% of the $500 initial investment.
一年后，如果股价下跌一半至50美元，你将亏本出售，获得500美元。因为这等于保证金金额，你会损失500美元初始投资的100%。
How much can investors borrow?
投资者能借到多少钱？
For the proposed IPO, each brokerage firm will decide the amount they can lend to their clients for stock purchase based on their own risk assessment of the IPO, with the maximum bar multiplier generally not exceeding 9 times.
对于拟进行的首次公开募股，每家经纪公司将根据自己对首次公开募股的风险评估，决定可借给客户购买股票的金额。最大条数乘数一般不超过9倍。
That is, if there are $100 in the account, the margin amount is up to $900.
也就是说，如果账户中有100美元，保证金金额最高可达900美元。
However, not all stocks can be used to pledge margin trading.
然而，并不是所有的股票都可以用来质押融资融券。
Further reading: How to know whether a stock supports margin trading on moomoo?
How is margin interest calculated?
保证金利息是如何计算的？
The margin interest is calculated from the subscription deadline to the announcement of the results.
保证金利息由认购截止日期至公布业绩计算。
Assuming that the subscription deadline is November 4, the IPO is listed on November 12, and the results are announced on November 11, the interest will be calculated from November 4, and the margin will be used for a total of 8 days.
假设认购截止日期为11月4日，IPO于11月12日挂牌，11月11日公布结果，从11月4日开始计息，保证金共使用8天。
Total interest payable = 900*2%*8/365 （2% interest rate）
应付利息总额=900*2%*8/365(2%利率)
by Rachel
作者：雷切尔
