Margin accounts allow for increased flexibility when investing. They provide the investor with the option to purchase shares without necessarily having the funds for the full cost of the investment. This buying power is based on the cummulative loan value of the investments in the account, which in turn is based on each investment's value and quality. The amount is calculated from the market value of the securities either already in the account or to be acquired. Thus, the buying power may fluctuate depending on the type of security, as well as the market value of the security. See the table below for details.
Short selling involves selling a security that you do not own. Short sell orders can only be entered in margin-short accounts. The rules governing these transactions vary according to each North American stock exchange:
TSX and TSX Venture: Short sales may be executed at the price of the prior trade.
NYSE: Short sales may be executed only on an up-tick (the last trade for a security must take place at a price higher than the previous trade).
NASDAQ and OTCBB: Short sales may be executed if the bid price is higher than the previous bid price.
Margin
Type of Security
% Loan Value
Canadian &
U.S. Equities1
$5 & over + Option eligible
70%
$3 & over
50%
$3 & over + sector concentration in the account2
40% to 50%
Under $3
No loan value
Canadian & U.S. Options
No loan value
Mutual Funds
50%
Fixed Income Securities
Corporate Bonds and Debentures
50%
Municipal Bonds
95%
Provincial Bonds
95%
Commercial Paper &
Bankers' Acceptances
90%
Canada Bonds
96%
T-bonds (CDN or USD)
maturing in > 3 years
96%
T-bills / T-bonds (CDN or USD)
maturing in < 3 years
99%
Short Sales
Stock Value
Minimum Margin Required (as % of the market value)
(1) Except shares trading on the TSX Venture Exchange and on over-the-counter markets, which are not marginable. Disnat reserves the right to reduce or remove the amount of margin that can be attributed to any particular security.
(2) Stock or group of stocks of the same sector, representing 60% or more of the value of the portfolio.
(3) Short sales are not accepted for stocks below $3, however existing short positions may be held if the share price falls below $3.
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at one of our offices across Canada, or by appointment at a caisse Desjardins. If it's more convenient, we'll even meet you
in person and fill out the paperwork with you. How's that for
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Disnat is a division of Desjardins Securities. Desjardins Securities is a member of the Investment Industry Regulatory Organization of Canada (IIROC)
and a member of the Canadian Investor Protection Fund.
