Margin Disclosure Statement
Place Trade Financial is 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 following statement. Consult our experts regarding any questions or concerns you may have 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 Place Trade Financial. If you choose to borrow funds from Place Trade Financial, you will open a margin account with our firm. The securities purchased are Place Trade Financial’s collateral for the loan to you. If the securities in your account decline in value, so does the value of the collateral supporting your loan. As a result, Place Trade Financial can take action, such as issue a margin call and/or sell securities or other assets in any of your accounts held with the member, in order to maintain the required equity in the account.
It is important that you fully understand the risks involved in trading securities on margin. These risks include, but are not limited to, the following:
- You can lose more funds than you deposit in the margin account. A decline in the value of the securities that are purchased on margin may require you to provide additional funds to Place Trade Financial to avoid the forced sale of those securities in your Place Trade account.
- Place Trade Financial can force the sale of securities in your account. If the equity in your account falls below the maintenance margin requirements required under the law, or Place Trade’s higher “house” requirements, Place Trade can sell the securities in your account to cover the margin deficiency. You also will be responsible for any shortfall in the account after such a sale.
- Place Trade Financial can sell your securities without contacting you. Some investors mistakenly believe that a firm must contact them for a margin call to be valid, and that the firm cannot liquidate securities or other assets 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 Place Trade Financial has contacted a customer and provided a specific date by which the customer can meet a margin call, our firm can still take necessary steps to protect its financial interests, including immediately selling the securities without notice.
- You are not entitled to choose which security in your margin account is liquidated or sold to meet a margin call. Because the securities are collateral for the margin loan, Place Trade Financial has the right to decide which security to sell in order to protect its interest.
- Place Trade Financial can increase its “house” margin requirements at any time and is not required to provide written notice. 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(s).
- 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.