How much can I borrow when trading on margin?
What's the margin ratio when I use finance or short-selling?
The minimum margin ratio of financing is 50%, that is, when there is $10,000 cash in the account, you can buy up to $20,000 stocks (of which $10,000 uses own funds and $10,000 uses financing), and the financing leverage ratio is 2 times.
The minimum margin ratio of short-selling is 60%, that is, when there is $10,000 cash in the account, you can borrow up to $16,700 to short securities, and the short leverage ratio is 1.67 times.
How much can I borrow for financing?
In general, Futu won't provide financing and short-selling for one account with net assets less than $2,500. And if the net assets of one account are less than $2,000, the positions corresponding to the amount of financing and short-selling used will be forced to close.
On this basis, Futu will calculate your financing and short-selling power based on your net assets. However, according to Futu's own risk control guidelines, we limit the maximum loan amount of a single customer to no more than 2 million dollars.
(Futu has the right to adjust customer financing restrictions at any time according to its own operations or market conditions, and does not guarantee that the amount of financing will be infinitely enlarged or exceeds the limit without prior notice).
For example, suppose there is a net asset of $100,000 in customer A's account ($50,000 cash + $50,000 positions), the customer can raise up to $100,000 (depending on the positions, your actual purchasing power may be less than the maximum purchawsing power) to buy the financing stocks.
Suppose there is a $4,000,000 net asset in customer B's account ($2,000,000 cash + $2,000,000 positions), the customers can raise up to $2,000,000 to buy stocks (Limited by a single customer with a maximum loan amount of 2 million dollars).
What is the maximum market value can I short？
In the case of sufficient supply of stocks available for short selling, the short leverage ratio is 1.67 : 1, and approximately $10,000 can borrow the market value of stocks of $16,700, and the available securities will be limited if the supply of securities is insufficient.
(Futu has a cap on individual account, which is temporarily $2,000,000 and it may be adjusted based on market conditions without prior notice.)