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Please note that margin lending at Saxo is currently only available in Denmark, the Netherlands, and Singapore. |
Margin lending is a type of loan that lets you borrow money by putting up eligible assets in your account as collateral. This means that you can add leverage to your investing and take positions larger than your current cash balance or holdings. Clients based in certain countries can also use this facility to withdraw cash, and use the borrowed money for purposes other than investing.
How much can I borrow?
The amount you can borrow depends on the collateral value of eligible assets in your account. Each eligible asset has a rating from 1 (lowest assessed risk) to 6, which is used to determine the collateral value of the asset.
What is collateral value?
The collateral value is the amount of your assets that can be used as security for a loan. This value is not always equal to the market value of the assets. Saxo applies a "haircut" to the market value to determine the collateral value. For example, if you have stocks worth USD 1,000 and the haircut is 30%, the collateral value would be USD 700.
To view the collateral value of an instrument, navigate to the Trading Conditions > Click Instrument > See Collateral value.
Read more: What is collateral value?
What is a rating?
Each eligible asset has a rating ranging from 1 to 6. Instruments rated 1 have the highest collateral value, while higher ratings give you lower collateral value for margin lending.
Saxo determines the rating of an instrument by evaluating factors such as market capitalization, liquidity, volatility, country of incorporation, industry, and mergers & acquisitions activity of the underlying instrument.
Read more: What is a rating?
What happens if I exceed the loan limit?
In general, you need to monitor and ensure that your margin & loan utilization remains below 100% at all times to avoid a margin call. A margin call is an automated stop-out where Saxo cancels open orders and closes open positions in your account(s).
You can see your margin & loan utilization in the platform in account details. You will start receiving alerts once your margin & loan utilization reaches 50% (or higher).
How can I request margin lending?
If you are based in Denmark, the Netherlands, or Singapore and eligible for margin lending, navigate to the local pages beneath to read more:
- Denmark: https://www.home.saxo/da-dk/accounts/margin-lending
- Singapore: https://www.home.saxo/en-sg/accounts/margin-lending
- The Netherlands: https://www.home.saxo/nl-nl/accounts/margin-lending