ETFs- Exchange Traded Funds

ETFs are traded on exchanges similarly to shares of different companies. A Custody fee of 0.1% on a yearly basis is applied. The fee is calculated based on the nominal value of the client’s assets at the end of each day. ETFs cannot be “shorted”. The commissions for trading ETFs are the same as the commissions for trading shares on a given exchange.

Use ETFs as collateral for margin trading

Up to 75% of the invested amount in stocks, based on their current market value, can be used as collateral for margin trading on other financial instruments (currency, futures contracts, and contracts for difference). The specific percentage of collateral that can be applied to each stock is specified in the trading conditions for that stock.

To avoid concentration risk where clients have a very high exposure to the same underlying stock there will be additional collateral haircut on stocks. The additional haircut is applied only in the situation where in addition to the stock a long single stock CFD position is held. The additional collateral haircut on the stock value will be equivalent to the margin requirement of the CFD position. So in practice, this means the “Not available as margin collateral” will increase by the margin requirement of the single stock CFD.

Example:
Let’ look at a stock with collateral value 75% and CFD margin requirement 10%.
Stock price is 100, client has 100 shares with a total value of 100 x 100 = 10 000 and a collateral value of 75% x 10 000 = 7 500.
Using this collateral, and assuming no unrealized p/l and no cash, if the client opens 150 CFD his margin requirement would be 150 x 100 x 10% = 1 500 and his margin utilization would be 1 500 / 7 500 = 20%. If the stock and the CFD are on one and the same company a haircut is applied and the collateral value will be reduced by 1 500 to 6 000 and the margin utilization would be 1 500 / 6 000 = 25%.
If we assume instead of opening 150 CFDs, the client rather opens 375 CFDs the margin requirement would be 375 x 100 x 10% = 3 750 and his margin utilization would be 3750/7500 = 50%. If the stock and the CFD are on one and the same company a haircut is applied and the collateral value will be reduced by 3 750 to 3 750 and hence the new margin utilization would be 3750 / 3750 = 100%

Split orders

In case an order regarding a security is split, and filled partially over a period of more than one day, the total trading costs may increase. The reason for such increase is that the minimum fee may be charged more than one time based on the number of days necessary for the total execution of the order.

Trasferring Stocks

ELANA Trading offers the option to transfer shares to and from your trading account. Please, contact us for more information.

FIFO (First-In-First-Out)

When netting open FX positions Saxo uses FIFO (First-In-First-Out) rules, which means that the first position that you open is the first position to be closed. This is provided that the positions are on the same account and that none of the positions have related orders attached.
Example: You are trading EURUSD and have opened the following positions:

The first long position 1) will net out with the first short position 3), the second long position 2) will net out with half of the second short position 4), leaving only one short position of 1M EURUSD at the end of the trading day.