Please note that some stocks including Pink Sheets or Bulletin Board Stocks are not eligible for margin borrowing. Bonds: Most corporate, treasury, municipal, and government agency bonds are eligible for margin borrowing.
Interest rate type
Margin ability and margin requirements are subject without advance written notice to change based on liquidity, bond ratings, concentrations, and other risk factors. Money market funds, certificates of deposit CDsannuities, and options are not available as collateral for margin borrowing.
- Employee Stock Option (ESO) Definition
- Adjustable-rate mortgages ARMs offer less predictability but may be cheaper in the short term.
Maintenance Calls: Maintenance calls are due in four 4 business days under normal conditions. Exchange calls are due in one option rate program day.
Employee stock options ESOs are a type of equity compensation granted by companies to their employees and executives. Rather than granting shares of stock directly, the company gives derivative options on the stock instead.
House Required Minimums: If equity drops below house required minimum, or a call is issued for any other reason, you may be required to immediately sell securities or deposit additional funds promptly.
Concentrated Accounts: Margin maintenance is higher for concentrated accounts and requirements may vary per security.
Increased Maintenance Requirements: From time-to-time, we may be required by our clearing firm to increase maintenance requirements due to overall firm concentration, or unusual market conditions.
We further reserve the right to increase the requirements at our sole discretion.
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European Style Option Spreads To be considered a spread, the long and the short side must expire on the same day. If the expiration dates are not the same the short side will be treated as naked.
Maintenance Requirement: The short market value of the LEAPS will be deducted from the equity when figuring maintenance requirements for accounts holding these positions. The value of the long stock will be valued at the price of the stock or the strike price of the option, whichever is greater.
Margin Risks We are furnishing this document to you to provide some basic facts about purchasing securities on margin, and to alert you to the risks involved with trading securities in a margin account. Before trading stocks in a margin account, you should carefully review the margin agreement provided by option rate program broker.
What are options?
Consult your broker regarding any questions or concerns you may have with your margin accounts. When you purchase securities, you may pay for the securities in full or you may borrow part of the purchase price from your brokerage firm.
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If you choose to borrow funds from your firm, you will open a margin account with the firm. It is important that you fully understand the risks involved in trading securities on margin. These risks include the how to make money your business business You can lose more funds than you deposit in the margin account.
A decline in the value of securities that are purchased on margin may require you to provide additional funds to the firm that has made the loan to avoid the forced sale of those securities or other securities in your account.
The firm can force the sale of securities in your account. You also will be responsible for any shortfall in the account after such a sale. The firm can sell your securities without contacting you.
Employee Stock Option (ESO)
Some investors mistakenly believe that a firm must contact them for a margin call to be valid, and that the firm cannot liquidate securities in their accounts to meet the call unless the firm has contacted them first.
This is not the case.
Most firms will attempt to notify their customers of margin calls, but they are not required to do so. However, even if a firm has contacted a customer and provided a specific date by which the customer can meet a margin call, the firm can still take necessary steps to protect its financial interest, including immediately selling the securities without notice to the customer.
You are not entitled to choose which security in your margin account is liquidated or sold to meet a option rate program call. Because the securities are collateral for the margin loan, the firm has the right to decide which security to sell in order to protect its interests.
Stock options are a type of alternative compensation that some companies, including many startups, offer as part of their package for employees. Employees come on board at perhaps a lower-than-normal salary in exchange for the possibility of a big payday later on. Talk to a financial advisor if you have questions about your stock options or any other investments.
These changes in firm policy often take effect immediately and may result in the issuance of a maintenance margin call. Your failure to satisfy the call may cause the member to liquidate or sell securities in your account.
You are not entitled to an extension of time on a margin call.
While an extension of time to meet margin requirements may be available to customers under certain conditions, a customer does not have a right to the extension. Industry regulations may limit, in whole or in part, your ability to exercise voting rights of securities that have been lent or pledged to others.
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- Initiate an Exercise-and-Sell Transaction cashless Hold Your Stock Options If you believe the stock price will rise over time, you can take advantage of the long-term nature of the option and wait to exercise them until the market price of the issuer stock exceeds your grant price and you feel that you are ready to exercise your stock options.
You may receive proxy materials indicating voting rights for a fewer number of shares than are in your account, or you may not receive any proxy materials. Click here for some basic facts about purchasing securities on margin, and to alert you to the risks involved with trading securities in a margin account. Contact eOption regarding any questions or concerns you may have about margin accounts.