Who This Guide Is For
This guide is for Malaysian retail investors using M+ Global who want to understand and check margin ratios before making financing purchase decisions. Whether you’re new to margin trading or refining your strategy, knowing where to find this information is essential.
Understanding Margin Ratios
1. Initial Margin Ratio
The initial margin ratio determines how much of your own capital you need to open a leveraged position. Let’s use a practical example:
Suppose you want to buy a stock worth USD$1 million. If the initial margin rate is 100%, you must provide the full USD$1 million yourself—there’s no leverage (1× leverage). However, if the initial margin rate is 80%, you only need USD$800,000 of your own money. The remaining USD$200,000 comes as a loan from M+ Global—giving you 1.25× leverage.
The lower the initial margin ratio, the less capital you need upfront, but the higher your leverage and risk.
2. Maintenance Margin Ratio
The maintenance margin ratio is the minimum margin level you must keep in your account to hold a particular stock. If your account balance falls below this threshold, you risk a margin call or forced liquidation of your position. This ratio protects both you and M+ Global by ensuring sufficient buffer in volatile markets.
Remisier tip: Always monitor your maintenance margin ratio, especially during market downturns. It’s not just about meeting the minimum—maintaining a healthy buffer above it gives you peace of mind and flexibility if a stock moves against you.
How to Check a Stock’s Margin Ratio
Viewing a stock’s financing margin ratio on M+ Global is straightforward:
- Navigate to the Individual Stock Details page for the stock you’re interested in.
- Go to the Financing Information page section.
- Here you’ll see both the initial margin ratio and maintenance margin ratio displayed in detail.
Why This Matters for Your Trading
Checking margin ratios before you trade helps you:
- Calculate position size: Know exactly how much capital you need to deploy.
- Compare leverage across stocks: Different stocks have different ratios; higher-risk stocks often require higher margins.
- Plan risk management: Understand your breakeven point and margin call threshold.
- Avoid surprises: See the terms upfront rather than discovering them after you’ve entered a position.
Key Takeaways
- The initial margin ratio tells you what percentage of a stock’s value you must provide as capital to open a leveraged position.
- A lower initial margin ratio means you need less capital but carry higher leverage and risk.
- The maintenance margin ratio is the minimum balance you must keep to hold the stock without facing a margin call.
- Both ratios are visible on the Individual Stock Details > Financing Information page in M+ Global.
- Always check these ratios before entering a margin trade to ensure your strategy aligns with your capital and risk tolerance.
- Different stocks carry different margin requirements based on their volatility and risk profile.
Frequently Asked Questions
What’s the difference between initial margin ratio and maintenance margin ratio?
The initial margin ratio is what you need to open a position; the maintenance margin ratio is the minimum you must keep to hold it. Initial is higher (stricter at entry), and maintenance is lower (the floor to stay in the trade).
If a stock has an 80% initial margin ratio, how much can I leverage?
With an 80% initial margin ratio, you can achieve 1.25× leverage. You provide 80% of the purchase price, and M+ Global funds the remaining 20%.
Where exactly do I find the margin ratio in M+ Global?
Go to the Individual Stock Details page, then click on the Financing Information section. Both ratios are displayed there.
Can margin ratios change?
Yes, margin ratios can change based on market conditions and the stock’s risk profile. Always check before you trade to use the most current figures.
What happens if my account margin falls below the maintenance ratio?
If your margin level falls below the maintenance ratio, M+ Global may issue a margin call, requiring you to deposit more funds or sell positions to bring your account back into compliance.
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Source: based on the official M+ Global Help Centre (Malacca Securities Sdn Bhd). Fees, hours and procedures are set by Malacca Securities and the exchanges and may change — check the M+ Global app or ask your remisier for the latest.
Disclaimer: This guide is for general information only and is not financial advice.
