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Introduction > Bank services > Loans > Margin Trading

Margin trading

Margin trading is one of the favorite investment strategies for active investors. The principle of margin trading securities is reflected in that a portion of the client's investment into stocks is financed using funds borrowed from Fio whereby the purchased stocks are used as collateral.

A loan can be used to cover up to 85% of the total investment into the most traded titles, including ČEZ for example. Once the securities are sold, the client repays the loan including interest and keeps the profit, which can be much larger thanks to the leverage effect offered by the loan.

Why use such a loan when investing?

  • A loan can be repaid in part or in full at any time without any fees if the credit limit is not fully used.
  • Interest is calculated daily only on the drawn credit limit.
  • For intraday trades (buy in the morning, sell in the afternoon) you pay no interest on the credit limit used.
  • The "leverage effect" of a loan allows you to multiply returns; however risk is also multiplied.
  • You can speculate on growth and on declining values ( - short selling).

How much does margin trading cost?

Fees connected with margin trading depend on the specific market (see the links below) you are trading on.

 


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