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Understanding Your Credit Risks

Margin Accounts

What are the benefits and risks of margin account?

Benefits

  • A margin account is a brokerage account which allows you to borrow money against the investments in your account at a competitive interest rate. Please click here for more information.
  • You can leverage the account by using excess margin to buy additional investments. 
  • You can transfer excess margin out of the account for personal purposes; a readily available line of credit.
  • You can pay down the outstanding balance at any time.

Risks

  • The amount of money you can borrow is determined by securities you hold in the portfolio. Margin rates vary by security, and the minimum margin requirements are set by the Investment Industry Regulatory Organization of Canada(IIROC). HIDC reserves the right to impose more stringent margin requirements at any time without prior notice and it could often take effect immediately. You must ensure that you are aware of the margin rate of the securities in which you are borrowing funds. Please click here to view the margin rates.
  • The fluctuations of the values of securities can affect your account’s available margin. Unfavorable market conditions may result in negative margin balances within your account (“margin deficiency”). You must closely monitor your account to maintain a positive margin balance. Please click here for more information on margin account deficiencies.
  • If there is margin deficiency in your account, HSBC InvestDirect will attempt to notify you of the margin call on a best-effort basis. You are required to take action to cover the shortfall within the provided deadline - by deposit (cash or margin-eligible securities), by selling sufficient securities, or buy back sufficient short positions to avoid the forced sale or buy-back of those securities in your account. 
  • In accordance with the Margin Account Terms and Conditions, HSBC InvestDirect reserves the right to take necessary actions it deems desirable for its protection, including (without the necessity of a margin call) the immediate sale or buy back of securities to cover the current margin deficiency without prior notice. Margin sales or buy-backs to correct a margin shortfall will be charged at full commission fees (Online commission fee does not apply) and handling fee of $15.

Margin Requirement

1. Stocks and Exchange Traded Funds (ETF)

Table 1

Exchange Listed Long Positions Margin Requirement Maximum Loan Value
North American Equities    
Options eligible securities & IIROC List of Securities Eligible for Reduced Margin (LSERM) ($5.00 & above) 30% $300,000
Exchange Listed Securities ($3.00 & above) 50% $150,000
Double Leveraged ETF ($3.00 & above) 60% $200,000
SPACs Options eligible ($3.00 & above) 60% $200,000
SPAC’s Non Options eligible ($3.00 & above)  60% $100,000
All Securities listed on TSX Venture 100% -
Securities under $3.00 100% -
Triple Leveraged ETF 100% -
Global Equities    
Marketplace on IIROC   List of Recognized Exchanges 50% $150,000

1. Stocks and Exchange Traded Funds (ETF)

Table 1

Exchange Listed Long Positions North American Equities
Margin Requirement  
Maximum Loan Value  
Exchange Listed Long Positions Options eligible securities & IIROC List of Securities Eligible for Reduced Margin (LSERM) ($5.00 & above)
Margin Requirement 30%
Maximum Loan Value $300,000
Exchange Listed Long Positions Exchange Listed Securities ($3.00 & above)
Margin Requirement 50%
Maximum Loan Value $150,000
Exchange Listed Long Positions Double Leveraged ETF ($3.00 & above)
Margin Requirement 60%
Maximum Loan Value $200,000
Exchange Listed Long Positions SPACs Options eligible ($3.00 & above)
Margin Requirement 60%
Maximum Loan Value $200,000
Exchange Listed Long Positions SPAC’s Non Options eligible ($3.00 & above) 
Margin Requirement 60%
Maximum Loan Value $100,000
Exchange Listed Long Positions All Securities listed on TSX Venture
Margin Requirement 100%
Maximum Loan Value -
Exchange Listed Long Positions Securities under $3.00
Margin Requirement 100%
Maximum Loan Value -
Exchange Listed Long Positions Triple Leveraged ETF
Margin Requirement 100%
Maximum Loan Value -
Exchange Listed Long Positions Global Equities
Margin Requirement  
Maximum Loan Value  
Exchange Listed Long Positions Marketplace on IIROC   List of Recognized Exchanges
Margin Requirement 50%
Maximum Loan Value $150,000

Table 2

Exchange Listed Short Positions Margin Requirement Maximum Loan Value
Options eligible securities & IIROC List of Securities Eligible for Reduced Margin (LSERM) ( $5.00 & above) 130% $300,000
SPACs Option eligible ($3.00 & above) 160% $200,000
SPACs Non Option eligible ($3.00 & above) 160% $100,000
Other Securities ($3.00 & above) 150% $150,000
Securities under $3.00 200% -

Table 2

Exchange Listed Short Positions Options eligible securities & IIROC List of Securities Eligible for Reduced Margin (LSERM) ( $5.00 & above)
Margin Requirement 130%
Maximum Loan Value $300,000
Exchange Listed Short Positions SPACs Option eligible ($3.00 & above)
Margin Requirement 160%
Maximum Loan Value $200,000
Exchange Listed Short Positions SPACs Non Option eligible ($3.00 & above)
Margin Requirement 160%
Maximum Loan Value $100,000
Exchange Listed Short Positions Other Securities ($3.00 & above)
Margin Requirement 150%
Maximum Loan Value $150,000
Exchange Listed Short Positions Securities under $3.00
Margin Requirement 200%
Maximum Loan Value -

Securities on the Credit Watch List have higher margin requirements due to price volatility or liquidity and may have other trading restrictions. Please contact a HSBC InvestDirect representative for more information. 

2. Options

North American Options Margin Requirement Maximum Loan Value
Equity Options    
Long Call and Put Options 100% options premium -
Naked Call Options

(1) 100% options premium

+ (2) margin requirement of underlying security – any out of the money value (subject to minimum of 5% market value of underlying security)

$300,000
Naked Put Options

(1) 100% options premium

+ (2) margin requirement of underlying security – any out of the money value (subject to minimum of 5% aggregated exercise value of the option)

$300,000
Index Options    
CAD/US Indices (Broad Based)

(1) 100% options premium

+ (2) 15% of market value of index – any out of the money value (subject to minimum of 10% market value of index)

$300,000
CAD/US Indices (Narrow Based)

(1) 100% options premium

+ (2) 20% of market value of index – any out of the money value (subject to minimum of 10% market value of index)

$300,000

2. Options

North American Options Equity Options
Margin Requirement  
Maximum Loan Value  
North American Options Long Call and Put Options
Margin Requirement 100% options premium
Maximum Loan Value -
North American Options Naked Call Options
Margin Requirement

(1) 100% options premium

+ (2) margin requirement of underlying security – any out of the money value (subject to minimum of 5% market value of underlying security)

Maximum Loan Value $300,000
North American Options Naked Put Options
Margin Requirement

(1) 100% options premium

+ (2) margin requirement of underlying security – any out of the money value (subject to minimum of 5% aggregated exercise value of the option)

Maximum Loan Value $300,000
North American Options Index Options
Margin Requirement  
Maximum Loan Value  
North American Options CAD/US Indices (Broad Based)
Margin Requirement

(1) 100% options premium

+ (2) 15% of market value of index – any out of the money value (subject to minimum of 10% market value of index)

Maximum Loan Value $300,000
North American Options CAD/US Indices (Narrow Based)
Margin Requirement

(1) 100% options premium

+ (2) 20% of market value of index – any out of the money value (subject to minimum of 10% market value of index)

Maximum Loan Value $300,000

Please click here for more information on the Maximum Loan Value (Concentration Limits). 

3. Mutual Funds

Canadian Mutual Funds Margin Requirement Maximum Loan Value
Money Market Fund with Net Asset Value over $3.00 per unit 5% -
Marginable Canadian and US High Rate Savings Account**   5% -
Net Asset Value over $3.00 per unit 50% $200,000
Other Mutual Funds and Hedge Funds 100% -

3. Mutual Funds

Canadian Mutual Funds Money Market Fund with Net Asset Value over $3.00 per unit
Margin Requirement 5%
Maximum Loan Value -
Canadian Mutual Funds Marginable Canadian and US High Rate Savings Account**  
Margin Requirement 5%
Maximum Loan Value -
Canadian Mutual Funds Net Asset Value over $3.00 per unit
Margin Requirement 50%
Maximum Loan Value $200,000
Canadian Mutual Funds Other Mutual Funds and Hedge Funds
Margin Requirement 100%
Maximum Loan Value -

**Please contact a HIDC Investment Representative for the list of marginable HISA**

4. Precious Metals Certificates

Precious Metals Certificates* Margin Requirement Maximum Loan Value
Gold, Silver, Platinum 20% $300,000

4. Precious Metals Certificates

Precious Metals Certificates* Gold, Silver, Platinum
Margin Requirement 20%
Maximum Loan Value $300,000

*certificates issued by Canadian chartered banks and trust companies authorized to do business in Canada evidencing an interest in precious metals

5. GIC (Guaranteed Investment Certificate)

Guaranteed Investment Certificate Margin Requirement Maximum Loan Value
  50%  

5. GIC (Guaranteed Investment Certificate)

Guaranteed Investment Certificate  
Margin Requirement 50%
Maximum Loan Value  

6. Bonds, Debentures, Tresury Bills and Notes

Margin rates are determined based upon the creditworthiness of the issuer and the term risk of the debt security.

7. Government Bonds

Guaranteed by Government of Canada, USA, UK or federal government with credit rating of “AAA”

Maturity Date Margin Requirement
Within 1 year 1% x Days to Maturity / 365
Between 1-3 years 1%
Between 3-7 years 2%
Over 7 years 4%

Guaranteed by Government of Canada, USA, UK or federal government with credit rating of “AAA”

Maturity Date Within 1 year
Margin Requirement 1% x Days to Maturity / 365
Maturity Date Between 1-3 years
Margin Requirement 1%
Maturity Date Between 3-7 years
Margin Requirement 2%
Maturity Date Over 7 years
Margin Requirement 4%

Guaranteed by a Province of Canada or issued by IBRD

Maturity Date Margin Requirement
Within 1 year 2% x Days to Maturity / 365
Between 1-3 years 3%
Between 3-7 years 4%
Over 7 years 5%

Guaranteed by a Province of Canada or issued by IBRD

Maturity Date Within 1 year
Margin Requirement 2% x Days to Maturity / 365
Maturity Date Between 1-3 years
Margin Requirement 3%
Maturity Date Between 3-7 years
Margin Requirement 4%
Maturity Date Over 7 years
Margin Requirement 5%

Guaranteed by a Canadian or U.K. Municipal Corporation

Maturity Date Margin Requirement
Within 1 year 3% x Days to Maturity / 365
Over 1 year 5%

Guaranteed by a Canadian or U.K. Municipal Corporation

Maturity Date Within 1 year
Margin Requirement 3% x Days to Maturity / 365
Maturity Date Over 1 year
Margin Requirement 5%

8. Commercial and Corporate Bonds, Debentures and Notes

Maturity Date Margin Requirement
Within 1 year 3% x Days to Maturity / 365
Between 1-3 years 6%
Between 3-7 years 7%
Over 7 years 10%

8. Commercial and Corporate Bonds, Debentures and Notes

Maturity Date Within 1 year
Margin Requirement 3% x Days to Maturity / 365
Maturity Date Between 1-3 years
Margin Requirement 6%
Maturity Date Between 3-7 years
Margin Requirement 7%
Maturity Date Over 7 years
Margin Requirement 10%

9. Foreign Commercial, Corporate Bonds, Debentures and Notes

Maturity Date Margin Requirement
Within 1 year 3% x Days to Maturity / 365
Between 1-3 years 6%
Between 3-7 years 7%
Over 7 years 10%

9. Foreign Commercial, Corporate Bonds, Debentures and Notes

Maturity Date Within 1 year
Margin Requirement 3% x Days to Maturity / 365
Maturity Date Between 1-3 years
Margin Requirement 6%
Maturity Date Between 3-7 years
Margin Requirement 7%
Maturity Date Over 7 years
Margin Requirement 10%

10. Bank acceptances, Deposit certificate, Promissory notes and Debentures

Maturity Date Margin Requirement
Within 1 year 2% x Days to Maturity / 365
Between 1-3 years 6%
Between 3-7 years 7%
Over 7 years 10%

10. Bank acceptances, Deposit certificate, Promissory notes and Debentures

Maturity Date Within 1 year
Margin Requirement 2% x Days to Maturity / 365
Maturity Date Between 1-3 years
Margin Requirement 6%
Maturity Date Between 3-7 years
Margin Requirement 7%
Maturity Date Over 7 years
Margin Requirement 10%

11. Foreign Bank acceptances, Deposit certificate, Promissory notes and Debentures

(with net worth not less than $200 million)

Maturity Date Margin Requirement
Within 1 year 2% x Days to Maturity / 365
Between 1-3 years 6%
Between 3-7 years 7%
Over 7 years 10%

11. Foreign Bank acceptances, Deposit certificate, Promissory notes and Debentures

(with net worth not less than $200 million)

Maturity Date Within 1 year
Margin Requirement 2% x Days to Maturity / 365
Maturity Date Between 1-3 years
Margin Requirement 6%
Maturity Date Between 3-7 years
Margin Requirement 7%
Maturity Date Over 7 years
Margin Requirement 10%

Any commercial, corporate bonds, debentures, notes with market value of 50% or less of par value with a low credit rating will be margined at 50% subject to the minimum bond credit rating as below: 

  • **All Bonds that are rated non-investment grade and are rated below the following agency ratings will have 100% margin requirement**.

BBB(Low) ----------- DBRS 

B++(Low) ------------ CBRS 

Baa3    ---------------- Moody’s  

BBB-   ----------------- S& P

 

Notes:

  • Convertible Bonds, when a credit rating for the debt issuer is not available, the margin requirement for the convertible bond will be the same as the underlying security’s margin requirement.

12. Mortgage Backed Securities

The margin rate of these securities is the rate applicable to the government guaranteeing the mortgages plus an additional 25%.

Margin Requirement Calculation

Please click here for the margin requirement on different investment products.

Long stocks Short sell
BUY 500 Shares at $60. Margin Requirement=30% SHORT SELL 500 Shares at $60. Margin requirement=30% plus 100% 

#of shares * price * margin rate

= 500*$60*30%

= $9,000

#of shares * price * margin rate - sale proceeds

= 500*$60.00*130% -$30,000

= $9,000

Please click here for the margin requirement on different investment products.

Long stocks BUY 500 Shares at $60. Margin Requirement=30%
Short sell SHORT SELL 500 Shares at $60. Margin requirement=30% plus 100% 
Long stocks

#of shares * price * margin rate

= 500*$60*30%

= $9,000

Short sell

#of shares * price * margin rate - sale proceeds

= 500*$60.00*130% -$30,000

= $9,000

Trade Calculation Based on Account Available Margin

Please click here for the margin requirement on different investment products.

Long stocks Short sell
Margin available:$20,000

Stock Price: $60

Margin Requirement= 30%
Margin available:$20,000

Stock Price: $60

Margin Requirement= 130%

Margin available / price / margin rate

= $20,000/$60/30%


=1,111 shares

Margin available / price / margin rate

= $20,000/$60/30%

= 1,111 shares

Note: Margin requirement on this Short position is 130%. At the time of trade, 100% is the sales proceeds from the short sale transaction and an additional 30% margin is required at the time of trade.

Please click here for the margin requirement on different investment products.

Long stocks Margin available:$20,000

Stock Price: $60

Margin Requirement= 30%
Short sell Margin available:$20,000

Stock Price: $60

Margin Requirement= 130%
Long stocks

Margin available / price / margin rate

= $20,000/$60/30%


=1,111 shares

Short sell Margin available / price / margin rate

= $20,000/$60/30%

= 1,111 shares

Note: Margin requirement on this Short position is 130%. At the time of trade, 100% is the sales proceeds from the short sale transaction and an additional 30% margin is required at the time of trade.

Margin Requirement in Options Trading

Please click here for the options margin requirement chart.

 

1. LONG OPTION POSITION

You buy to open 10 contracts of Stock A’s PUT, strike price $50, trading at $1.50.

 

100% of options premium

= # of contracts * options price * 100 shares 

= 10 * $1.50 * 100

= 1,500

 

2. DEBIT SPREAD

Stock A is trading at $44. 

Buy to open 10 contracts of Stock A’s CALL, strike price $50, trading at $1.50

Sell to open 10 contracts of Stock A’s CALL, strike price $55, trading at $0.50.

Both positions have the same expiry date. 

 

Premium paid for long CALL - Premium received for short CALL

= (10*$1.50*100) - (10*$0.50*100)

= 1,000

 

3. CREDIT SPREAD

Stock A is trading at $44. 

Buy to open 10 contracts of Stock A’s CALL, strike price $55, trading at $0.50

Sell to open 10 contracts of Stock A’s CALL, strike price $50, trading at $1.50.

Both positions have the same expiry date. 

 

Difference between strike price 

- Premium received for short CALL 

+ Premium paid for long CALL

= (55-50)*10*100 - (10*$1.50*100) + (10*$0.50*100)

= 4,000

 

 

4. NAKED CALL OPTIONS

Stock A is trading at $44. 

Sell to open 10 contracts of Stock A’s CALL, strike price $50, trading at $1.50.

 

(1) 100% options premium

+ (2) margin requirement of underlying security – any out of the money value (subject to minimum of 5% market value of underlying security)

= (10*$1.50*100) + (44*10*100*30%) - (50-44)*10*100

= 8,700

 

5. NAKED PUT OPTIONS

Stock A is trading at $62. 

Sell to open 30 contracts of Stock A’s PUT, strike price $50, trading at $0.20.

 

(1) 100% options premium

+ (2) margin requirement of underlying security – any out of the money value (subject to minimum of 5% aggregated exercise value of the option)

= (30*$0.20*100) + (62*30*100*30%) - (62-50)*30*100

= 20,400

Concentration Guideline

In addition to the minimum margin requirements, HSBC InvestDirect Credit Policy has Concentration limits which is the maximum amount that can be borrowed against a security, or the maximum dollar value of a short position, or the maximum number of contracts you can write on CALL and PUT options. Each security has its own concentration limit and the limits are generally tied to the margin requirements of its corresponding security types. It is important to understand these limits to avoid margin or concentration calls. 

What is the margin required for my trade?

Type of Transaction Long stocks Short Sell Naked Options

STOCK A (option-eligible)

Concentration limit = $300,000

BUY 12,000 shares at $60

Margin Requirement =30%

SHORT SELL 2,000 Shares at $280. 

Margin requirement =130%

SHORT 120 contracts of PUT options with price of underlying at $45. Margin requirement= 30%
Loan extended by HIDC:

12,000*$60*70%

=$504,000

capped at maximum $300,000

2,000*$280*70%

=$392,000

capped at maximum $300,000

12,000*$45*70%

=$378,000

capped at maximum $300,000

Margin required for client:

Value of trade – loan extended

(12,000*$60)-$300,000

=$420,000

(2,000*$280)-$300,000

=$260,000

(12,000*$45)-$300,000

=$240,000

What is the margin required for my trade?

Type of Transaction

STOCK A (option-eligible)

Concentration limit = $300,000

Long stocks

BUY 12,000 shares at $60

Margin Requirement =30%

Short Sell

SHORT SELL 2,000 Shares at $280. 

Margin requirement =130%

Naked Options SHORT 120 contracts of PUT options with price of underlying at $45. Margin requirement= 30%
Type of Transaction Loan extended by HIDC:
Long stocks

12,000*$60*70%

=$504,000

capped at maximum $300,000

Short Sell

2,000*$280*70%

=$392,000

capped at maximum $300,000

Naked Options

12,000*$45*70%

=$378,000

capped at maximum $300,000

Type of Transaction

Margin required for client:

Value of trade – loan extended

Long stocks

(12,000*$60)-$300,000

=$420,000

Short Sell

(2,000*$280)-$300,000

=$260,000

Naked Options

(12,000*$45)-$300,000

=$240,000

What is the maximum trade size with my current margin available?

Type of Transaction Long stocks Short Sell Naked Options

STOCK A (option-eligible)

Margin available: $150,000

Margin available: $150,000

Margin available: $150,000
Number of shares or contracts marginable:

$300,000/70%/$60

=7,142 shares

$300,000/70%/$280

=1,530 shares

$300,000/70%/$45/100 shares

=95 contracts

How many shares or contracts you can trade with the margin available:

Marginable:

7,142 shares *$60*30%

=$128,556

No loan extended:

($150,000-$128,556)/$60

=357 shares.

7,142 + 357 =7,499 shares

Marginable:

1,530 shares*$280*30%

=$128,520.

No loan extended:

($150,000-$128,520)/$280

=76 shares

1,530 + 76 = 1,606 shares

95 contracts *$45*30%*100

= $128,250

No loan extended:

(150,000-$128,250)/$45/100

=4 contracts

95 + 4 = 99 contracts

What is the maximum trade size with my current margin available?

Type of Transaction

STOCK A (option-eligible)

Long stocks

Margin available: $150,000

Short Sell

Margin available: $150,000

Naked Options Margin available: $150,000
Type of Transaction Number of shares or contracts marginable:
Long stocks

$300,000/70%/$60

=7,142 shares

Short Sell

$300,000/70%/$280

=1,530 shares

Naked Options

$300,000/70%/$45/100 shares

=95 contracts

Type of Transaction

How many shares or contracts you can trade with the margin available:

Long stocks

Marginable:

7,142 shares *$60*30%

=$128,556

No loan extended:

($150,000-$128,556)/$60

=357 shares.

7,142 + 357 =7,499 shares

Short Sell

Marginable:

1,530 shares*$280*30%

=$128,520.

No loan extended:

($150,000-$128,520)/$280

=76 shares

1,530 + 76 = 1,606 shares

Naked Options

95 contracts *$45*30%*100

= $128,250

No loan extended:

(150,000-$128,250)/$45/100

=4 contracts

95 + 4 = 99 contracts

Concentration Exception Request

An increase to Maximum Loan value extended may be granted on an exceptional basis, but only within IIROC regulatory margin requirements. Please submit a request by email to investdirect@hsbc.ca, or contact us at 1.800.760.1180

Please include the following information on your request:

ACCOUNT #:

NAME:

EXTENDED LOAN REQUEST ON THE FOLLOWING STOCKS:

INCREASE DEBIT LIMIT (ACCOUNT DEFAULT LIMIT $750,000): 

Margin Shortfall

You will receive a “Margin Call” message in your online account. You are required to take action to cover the shortfall within the provided deadline - by deposit (cash or margin-eligible securities), or sell sufficient securities, or buy back sufficient short positions to avoid the forced sale or buy-back of those securities in your account. HSBC InvestDirect reserves the right to take necessary actions to protect our financial interests including the immediate sale or buy back of securities to cover the current margin deficiency without prior notice.

In accordance with the Margin Account Terms and Conditions, HSBC InvestDirect reserves the right to take necessary actions it deems desirable for its protection, including (without the necessity of a margin call)  the immediate sale or buy back of securities to cover the current margin deficiency without prior notice. 

Margin sales or buy-backs to correct a margin shortfall will be charged at full commission fees (Online commission fee does not apply) and handling fee of $15.

Cash / Registered Accounts

What are the benefits and risks of Cash / Registered Accounts?

Benefits

  • A Registered account is a brokerage account which allows you to invest your retirement plan account money.
  • You can have investment opportunities through a variety of investment vehicle, including stocks, bonds, mutual funds and more.
  • You can invest and trade in 30 domestic and international markets.

 

Risks

  • In accordance with the General Terms and Conditions, account delinquency or stock oversold are prohibited in Cash and Registered accounts.
  • According to CRA, debit in registered plan is prohibited, including debit caused by RIF / LIF payments.
  • Cash accounts can be restricted to “Cash up front” if marked 3 times as delinquent, meaning funds must be available in the account prior to placing a buy order.
  • Incorrect trade settlement, or bank holds on funds may result in an account delinquency, please ensure the right settlement instructions are chosen at the time of trade, and ensure funds are available for settlement in a linked bank account.
  • If your account goes in delinquency or stocks are oversold, we will attempt to notify you of the debit call or oversell on best-effort basis. You are required to take action to cover the shortfall within the provided deadline – by cash deposit or buy-back short position to avoid the forced sale of securities or forced buy-back in your account. HSBC InvestDirect reserves the right to take necessary actions to protect our financial interests including the immediate sale or buy back of securities to cover the current deficiency without prior notice.
  • Missing booking an exchange rate through the Automatic HRSA Sweep & Redemption Service or insufficient USD High Interest Saving account / money market fund may result in a delinquency in a Registered account.
  • We reserve the right to decide which security to sell or buy back in order to protect our financial interests. All forced sale or buy-back will be charged at full commission fees (Online commission fee does not apply) and handling fee of $15.

Important Reminders on Account Settlement

Do

  • Have sufficient fund for the purchase on settlement date
    (T+2 for stocks; T+1 for options).

  • Have money market fund/HRSA sold ready for the purchase settlement.

  • Cover the RIF/LIF payment debit on time.

  • Leave FX cushion when making purchase with different currency settlement.

  • Choose the appropriate trade settlement instruction.

  • Make sure to have cleared funds in the bank account for transfer in to trading account.

  • Sign up for the Automatic HRSA Sweep & Redemption Service for the convenience of USD$ purchases in a Registered account.

Do not

  • Leave the account delinquent or in a debit at any time.

  • Transfer in funds/ make RSP contributions without cleared funds at the linked bank account.

  • Sell to cover the purchase on different settlement date.

  • Miss booking exchange rates through the Automatic HRSA Sweep & Redemption Service for USD$ purchase in a Registered account.

  • Invest all available funds in RIF or LIF account in Non-cashable/redeemable GIC.

  • Oversell your holdings creating a short position.

  • Get marked as delinquent 3 times, as Cash Up Front restrictions will be imposed on your account.

Maximum Trade Size in Cash Accounts

Cash account - The maximum trade size purchase equals to the total equity in the cash trading account excluding venture stock or non-marginable stock holdings. 

Cash account with Cash Up Front restriction - The maximum trade size purchase equals to your available funds and money market funds/HRSAs minus any open buy orders in the cash trading account, including cleared fund deposit from your linked up bank account. 

Maximum Trade Size in Registered Accounts

The maximum trade size purchase equals to your available funds and money market funds/HRSAs minus any open buy orders in the Registered trading account.

Lending in Cash / Registered Accounts

Lending in Cash / Registered Accounts are not allowed. Funds must be available for the settlement of trades in Cash and Registered Accounts.

Trade Settlement

In general, stocks settle in T+2, i.e. trade date plus two business days; options settle in T+1, i.e. trade date plus one business day. Settling trades by selling securities on the next day or later days to cover the offsetting debit are not allowed in Cash accounts or Registered accounts.

Automatic HRSA Sweep & Redemption Service in Registered Account

This service is intended for USD currency trades only in Registered accounts. Please ensure you have enrolled for this service and designated your HRSA and have sufficient HRSA for your USD currency trades.

Access the form here.

1 North American securities prices are in the currency of the marketplace on which they trade (e.g. TSX listed security in Canadian dollars).

2 Maximum Loan Value amount is in the currency of the account type (e.g. Canadian account = Canadian dollars).

3 Margin calculations are for illustrative purposes only

4 Sample calculations have not included applicable commissions and fees

5 The firm reserves the right to change the margin requirement at any time without prior notice and the changes often take effect immediately, as indicated in the Margin Account Terms and Conditions.

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