Position Keeping Schemes and Margin Trading
QUIK employs three position keeping schemes for clients, two of which support margin lending in operation.
Schemes for position keeping
- By discount*
The purchasing power of the client is checked in compliance with the requirements of the Order. When the client places an order, it is checked that it does not:
- make the portfolio value fall below the level of the adjusted margin,
- create or increase a short position, if the market falls by 5% or more,
- create a currently uncovered position in a non-liquid security.
The client's portfolio can be evaluated using discounts defined by the broker or by the Central Counterparty (CCP), which are transmitted from the trading system of the Moscow Exchange in online mode. The CCP discounts on some securities may be modified by the rules of the broker.
* margin lending is supported
- Control of the current value of assets and leverage*
This scheme allows calculating the maximum value of borrowed funds (margin limit), based on the value of the client's assets and a specified lending rate (leverage).
- For an open position
The scheme allows setting and monitoring the following limits on the size of positions in terms of cash:
- a short or long position in a specific security,
- the total volume of short and long positions in all securities,
- the total volume of all positions, short or long, in securities and cash,
- the turnover of operations for a trading session.
Managing Margin TradingQUIK provides the following tables to review and monitor margin lending parameters and available assets, and to open short and long positions:
Client portfolio: with such parameters as client’s portfolio value; minimum, initial and adjusted margin; asset sufficiency; margin ratio; used leverage; monetary evaluation of assets available for opening positions for margin and non-margin securities as well as client's own assets, and debt to the broker. The set of displayed parameters depends on a selected margin-lending scheme. The table displays information on all client codes that are available to the current user. Thus, the broker or a sub-broker may review information on all of their clients.
Buy/Sell: with the current size of position in securities and cash value for each instrument in the client's portfolio, the volume of securities available for opening short and long positions. When the margin-lending scheme 'By discounts' is used, the table also displays discounts used for calculating margin parameters.
The state of account: table allows monitoring online one’s own position in cash and securities. The table functionality lets the user close and 'reverse' either selected or all available positions.
To facilitate tasks of risk management and automated execution of regulatory procedures when providing margin lending to clients on stock, FX, and derivatives markets, risk managers are offered to use a specialized terminal Colibri which allows:
- sending ‘margin calls’ and reporting on sent notifications,
- calculating a planned client position with potential values of margin indicators in case of withdrawal or additional deposit of cash,
- closing client positions when the client’s margin status does not meet certain conditions,
- rolling over to the next day short and long positions, that clients leave open before the trading session is finished, by executing REPO trades or REPO with CCP.
Global Limit on Borrowed FundsTo simplify control over the use of margin resources, the broker may use a global limit on borrowed funds that applies to all its clients or to its sub-broker's clients (limit on a sub-broker). The global limit may be set on each type of security or on cash.
The tasks resolved
- the broker controls the volume of used borrowed funds by each instrument,
- the broker distributes borrowed funds between sub-brokers,
- QUIK server rejects client's orders that exceed the broker's position in a given instrument.