By the end of this training course, trainees will be able to:
- Differentiate between cash and margin accounts.
- Calculate initial and maintenance margins.
- Manage margin calls and avoid forced liquidation.
- Utilize leverage and short selling to maximize opportunities.
- Identify the loan aspect of margin trading and the risks involved.
- ZagTrader Employees.
- To provide trainees with a detailed understanding of margin accounts, including how they work, the associated risks, and the regulations governing them. The course will also cover how to calculate initial and maintenance margins, manage margin calls, and use leverage effectively. Additionally, it will explain short selling and the loan aspect of margin trading, preparing trainees to use margin accounts both for profit and risk management.
- Introduction to Margin Accounts:
- Cash vs. Margin Accounts, Overview of Margin Trading, Loan Aspect of Margin Trading, Importance of Margin Regulations
- Key Margin Concepts and Practical Exercises:
- Initial Margin concept & calculation, Maintenance Margin concept & calculation, Margin Call concept & management, Leverage and its effects
- Loan Aspect of Margin Trading:
- Borrowed Capital, Interest Payments, Collateral and Risk, Repayment Obligation
- Short Selling Using Margin Accounts:
- Borrowing Shares, Selling at Market Price, Buying Back at Lower Price, Short Position Risks
- Advantages and Disadvantages of Margin Trading:
- Increased Buying Power, Flexibility in Investment, Amplified Losses, Margin Calls and Forced Liquidation, Interest on Borrowed Funds