To The Moon

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 three decisive metrics:

The "risk level" shown in the App uses the excess liquidity ratio = excess liquidity ÷ total equity, which you can view on the Positions page by tapping Excess Liquidity.

Importantly, forced liquidation is executed via market orders, and any or all positions in the account may be closed — not necessarily the one you would have chosen to trim (although you can nominate positions to be liquidated last via Liquidation Settings). So it is better to monitor your EL metrics continuously than to wait for a notification.

A simplified case

Suppose a user has:

• own funds: USD 10,000

• margin borrowed: USD 10,000

• total position: USD 20,000

If the position falls 15%:

• the position is worth USD 17,000;

• the margin liability remains around USD 10,000;

• the user's net assets fall to roughly USD 7,000.

Whether a margin call is triggered still depends on the maintenance margin applicable to the holdings and on the account's overall position. But it shows clearly that where financing is involved, a market fall has an amplified effect on your own funds.

Besides a price fall, the following may also raise account risk:

• a shorted stock's price rising;

• margin requirements being increased (including add-ons triggered by excessive concentration, oversized naked option exposure or near-expiry option combinations — see Issue 5);

• withdrawing cash from the account;

• adding new margin positions;

• adverse exchange rate movements;

• excessive concentration of holdings.

If account risk remains too high, the broker may sell account assets or close out part of the holdings to meet margin requirements or reduce risk.

A related point: whether you can open a new position depends on a different metric

Whether an account can open a position (buying long, non-Tiger Vault fund subscriptions, short sales and so on) is judged on available funds (AEE):

Available funds AEE = equity with loan value ELV − initial margin IM − locked amount

Only when AEE is above 0 can the account open a position. AEE is not the same as available cash. Put simply: AEE governs "can I still buy", EL governs "will I be liquidated".

Key takeaway

A margin call may be triggered by more than a falling share price — margin rates, exchange rates, withdrawals and new positions can all affect account risk. The number to watch is excess liquidity (EL).

Further reading (Help Centre)

• Risk status

• Checking your risk level in the Tiger Trade App

• Available funds (AEE)

• Margin increase scenarios

Quiz: Which of the following could increase the risk of a margin call?

• A. A leveraged position falls in value

• B. Margin requirements are increased

• C. Cash is withdrawn from the account

• D. All of the above

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Upgrade to Margin Account now and enjoy a limited-time offer: successfully open a margin account to receive 10 brokerage-free trades + 2,000 Tiger Coins*. Tiger Coins can be used to redeem vouchers, merchandise, and more.

*Min. brokerage waived. Third-party trading fees and other fees still apply. The card is valid for 60 days. See T&Cs . Trading in derivatives or leveraged financial products involves significant risks, including the risk of losses exceeding initial investment, and may not be suitable for every investor.

Upgrading to a margin account provides access to a broader range of tools and features. Whether to use these features should be considered carefully based on your investment objectives, financial situation, trading experience, and risk tolerance. For more details on margin account features, currency-specific interest rates, and fee schedules, please visit the Margin Account page and Pricing page, Help Centre and our Risk Disclosure.

This material is provided for general information purposes only and does not constitute financial product advice, investment advice or a recommendation. This information does not take into account your objectives, financial situation or needs. Any securities mentioned are provided for illustrative purposes only and do not constitute a recommendation, solicitation or endorsement. All investment products carry risk and are not suitable for all investors. Margin lending and short selling carry a high level of risk and may not be suitable for all investors. If the value of your collateral falls or your position moves against you, Tiger Brokers (AU) may be required to sell your holdings or close your positions without prior notice to meet margin requirements or limit potential losses. Rates, margin requirements, product features and eligibility criteria are subject to change, and the information available on the Tiger platform and official website at the relevant time will prevail. Before trading, please read the relevant PDS and T&Cs, ensure you fully understand the risks involved, and seek independent professional advice where appropriate.