My answer: B. USD 300 loss. Simple calculation: Short 10 shares at $100 โ receive $1,000 Price rises to $130 Buy back 10 shares โ pay $1,300 Loss = $1,300 โ $1,000 = $300 Easy rule: Short + price goes down โ you make money. Short + price goes up โ you lose money. The higher the stock rises, the bigger your potential loss. Important: Short selling is riskier than normal buying because a stock can theoretically rise without limit.
Iโd pick C. ๐ก If thereโs no USD cash available to settle a US stock purchase, the position can result in a USD margin loan, with interest potentially accruing on the borrowed amount. The key lesson: having AUD cash doesnโt automatically mean you have USD cash available without financing implications.
B โ A USD 300 loss. ๐ You shorted at $100 and bought back at $130, losing $30 ร 10 shares = $300. With a short position, you lose when the stock price rises.
C โ USD margin loan. ๐ต If thereโs no USD cash available to fund the U.S. stock purchase, the trade can create a USD borrowing balance, and interest may accrue. The key is that holding AUD doesnโt automatically mean you have USD available without a currency conversion or financing cost. ๐
B โ Lower margin requirement. ๐ The position sizes are identical, so the difference comes down to how much margin the broker requires for each stock. Lower requirement = less collateral needed. ๐ก
D โ All of the above. ๐ A leveraged position falling in value reduces your equity, higher margin requirements raise the amount you need to maintain, and withdrawing cash reduces your safety cushion. Any of these can bring an account closer to a margin call.
when use margin. #do not utilize gilly # always have some spare cash to cover if margin call 4. always have as top loss, to avoid margin call, if stop loss hit close the position and move on... do not average...
D โ All of the above. A margin call is not simply about a stock price falling. The real risk is whether your Excess Liquidity (EL) remains above the required level. A leveraged position falling can quickly reduce your equity. But higher margin requirements, cash withdrawals, new leveraged positions, exchange-rate moves, and excessive concentration can also push your account toward liquidation. The key distinction is simple: EL tells you how close you are to liquidation, while AEE tells you whether you have room to open new positions. The biggest lesson? Leverage magnifies both gains and losses. Donโt wait for a margin call notificationโmonitor your risk level continuously and keep enough liquidity to survive a sharp market move. @Tiger_AU
Margin 101 | 06 Your position falls 15% โ does that trigger a margin call?
A margin call is a demand for additional margin. When a margin account's net assets or risk level no longer meet the maintenance margin requirement, a user may need to: add cash or eligible assets; repay part of the financing; or reduce existing positions. Important: This material is provided for general educational and informational purposes only and does not constitute financial product advice, investment advice, or a recommendation. Margin lending, short selling, and other leveraged trading strategies involve significant risks and may not be suitable for all investors. Losses may exceed your initial investment. Before investing, consider whether the product is appropriate for your objectives, financial situation and needs, and read the relevant PDS and risk disclosures. First, learn the
My view: this is a very important point for beginners to understand. A margin limit is NOT borrowed money. For example: Margin limit: AUD 50,000 Actually borrowed: AUD 10,000 Interest is charged on: AUD 10,000 only So simply having a large margin limit does not mean you are paying interest. However, margin trading is risky. If the stock falls sharply, you may lose more money and could face a margin call. My advice: If you are a beginner and investing for the long term, avoid using margin unless you fully understand the risks. Quiz answer: C โ AUD 10,000.
My answer: B. USD 300 loss. Simple calculation: Short 10 shares at $100 โ receive $1,000 Price rises to $130 Buy back 10 shares โ pay $1,300 Loss = $1,300 โ $1,000 = $300 Easy rule: Short + price goes down โ you make money. Short + price goes up โ you lose money. The higher the stock rises, the bigger your potential loss. Important: Short selling is riskier than normal buying because a stock can theoretically rise without limit.
Iโd pick C. ๐ก If thereโs no USD cash available to settle a US stock purchase, the position can result in a USD margin loan, with interest potentially accruing on the borrowed amount. The key lesson: having AUD cash doesnโt automatically mean you have USD cash available without financing implications.
B โ A USD 300 loss. ๐ You shorted at $100 and bought back at $130, losing $30 ร 10 shares = $300. With a short position, you lose when the stock price rises.
C โ USD margin loan. ๐ต If thereโs no USD cash available to fund the U.S. stock purchase, the trade can create a USD borrowing balance, and interest may accrue. The key is that holding AUD doesnโt automatically mean you have USD available without a currency conversion or financing cost. ๐
B โ Lower margin requirement. ๐ The position sizes are identical, so the difference comes down to how much margin the broker requires for each stock. Lower requirement = less collateral needed. ๐ก
D โ All of the above. ๐ A leveraged position falling in value reduces your equity, higher margin requirements raise the amount you need to maintain, and withdrawing cash reduces your safety cushion. Any of these can bring an account closer to a margin call.
Margin 101 | 06 Your position falls 15% โ does that trigger a margin call?
A margin call is a demand for additional margin. When a margin account's net assets or risk level no longer meet the maintenance margin requirement, a user may need to: add cash or eligible assets; repay part of the financing; or reduce existing positions. Important: This material is provided for general educational and informational purposes only and does not constitute financial product advice, investment advice, or a recommendation. Margin lending, short selling, and other leveraged trading strategies involve significant risks and may not be suitable for all investors. Losses may exceed your initial investment. Before investing, consider whether the product is appropriate for your objectives, financial situation and needs, and read the relevant PDS and risk disclosures. First, learn the
Margin 101 | 05 Same USD 10,000 order: why can the margin required differ so much between two stocks
Some users notice: I bought USD 10,000 of two different stocks โ why did one tie up less margin than the other? Because securities differ in risk, volatility and liquidity, the applicable margin requirements may differ too. Important: This material is provided for general educational and informational purposes only and does not constitute financial product advice, investment advice, or a recommendation. Margin lending, short selling, and other leveraged trading strategies involve significant risks and may not be suitable for all investors. Losses may exceed your initial investment. Before investing, consider whether the product is appropriate for your objectives, financial situation and needs, and read the relevant PDS and risk disclosures. What range do margin rates fall in? Taking histor
Margin 101 | 04 How does short selling work? Reading short risk through the 2021 GameStop squeeze
An ordinary stock trade usually goes: Buy first, then sell after the price rises. That is going long. Short selling reverses the order: Borrow the security and sell it first, then buy it back later and return it. Important: This material is provided for general educational and informational purposes only and does not constitute financial product advice, investment advice, or a recommendation. Margin lending, short selling, and other leveraged trading strategies involve significant risks and may not be suitable for all investors. Losses may exceed your initial investment. Before investing, consider whether the product is appropriate for your objectives, financial situation and needs, and read the relevant PDS and risk disclosures. A simple example Suppose a stock currently trades at USD 100
Margin 101 | 03 Want to buy NVIDIA but only hold AUD โ do you have to convert to USD first?
Many Australian investors hold mainly AUD in their accounts, while the names they follow โ NVIDIA, Tesla, Apple and others โ trade in USD. In a cash account, a user generally needs to hold cash in the relevant currency first.A margin account supports multi-currency financing. Tiger currently supports AUD, USD, HKD and CNH financing; actual capacity and scope are subject to your account page and approval outcome. Important: This material is provided for general educational and informational purposes only and does not constitute financial product advice, investment advice, or a recommendation. Margin lending, short selling, and other leveraged trading strategies involve significant risks and may not be suitable for all investors. Losses may exceed your initial investment. Before investing, c
Margin 101 | 02 Sale proceeds haven't settled โ does the next trade have to wait?
Say you sold an Apple holding on Monday, and later the same day you spot a fresh opportunity in NVIDIA or another stock. Once you sell, the order is filled โ but the cash may still be working its way through settlement. $Apple(AAPL)$$NVIDIA(NVDA)$ Since 28 May 2024, the standard settlement cycle for most US securities transactions has shortened from T+2 to T+1. In other words, a US stock sold on Monday will normally settle on the next business day. Important: This material is provided for general educational and informational purposes only and does not constitute financial product advice, investment advice, or a recommendation. Margin lending, short selling, and other leveraged trading strategies involve
Margin 101 | 01 Buying AAPL before an Apple event: does an unused limit accrue interest?
When users open the margin account page, many see a "margin limit" or "available buying power" and immediately wonder: Have I already borrowed money? Will this limit start accruing interest straight away? The answer: a margin limit is not the same as money borrowed. Your margin limit represents the financing capacity you may be able to draw on, within your approved limit, your asset position and the applicable margin requirements. Interest only arises once you actually draw on margin funds and a margin balance is created. Tiger charges margin interest on the amount actually borrowed, not on your full approved limit. Important: This material is provided for general educational and informational purposes only and does not constitute financial product advice, investment advice, or a reco
๐The correct answer to this quiz is B: Stock A has a lower margin requirement. Why? Even though you are deploying an identical USD10,000 of principal into both assets, Tiger Brokers do not view them with equal risk. Example: $BHP GROUP LTD(BHP.AU)$ vs $COBRE LTD(CBE.AU)$ BHP has a market cap of AUD 200 billion while Cobre has a market cap of only AUD 308 million. Price volatility: BHP is moderate & follows trends with global macro economic implications. Cobre is highly volatile & tends to swing wildly. Why BHP is given maximum leverage: The asset is stable, transparent & ultra liquid. Why Cobre commands high margin: Small cap explorers like Cobre may not have the buyers on the ot