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Use leverage to get the most out of your trades with margin

  • Stock margin requirements as low as 30%
  • Trade 17 different complex option strategies
  • FX margin requirements as low as 3%
  • CFD margin requirements as low as 4%

What you need to know when trading with margin

With a margin account at Questrade:

  • You can leverage your stock trading
  • You can short stocks
  • You can trade complex option strategies
  • You can leverage your precious metals trading

Margin requirements

The margin requirement is the minimum amount of maintenance excess you must have in your account in order to enter a position. It is commonly expressed as a percent of the current market value. Certain securities may have a margin requirement higher than listed below based on an assessment of the stock by Questrade. Margin requirements are determined according to rules and guidelines set by Investment Industry Regulatory Organization of Canada (IIROC) and Questrade internal risk management protocols. The margin required for long and short positions on the same security may be different from one another.

Long positions

Share Price Requirement
Reduced margin eligible securities* 30% of the market value
Securities selling at $2.00 or more 50% of the market value
Securities selling at $1.75 to $1.99 60% of the market value
Securities selling at $1.50 to $1.74 80% of the market value
Securities selling less than $1.50 100% of the market value

Short Positions

Reduced margin eligible securities* 30% of the market value
Securities selling at $2.00 or more 50% of the market value
Securities selling at $1.50 to $1.99 $3.00 less the market price per share
Securities selling at $1.00 to $1.49 100% of market value

Over the counter stocks are generally not eligible for margin.

*Canadian securities' eligibility for reduced margin is determined by Investment Industry Regulatory Organization of Canada (IIROC) on a quarterly basis. Most major US stocks with listed options are eligible for reduced margin as well. Questrade reserves the right to margin certain securities it deems risky at higher rates than listed above.

Questrade has four approval levels for option trading that require different minimum balances in your account before placing your trade. The option strategies for each option level can be found below.

Minimum equity required

How to change your option level: log in to Questrade, under the ACCOUNTS tab select ACCOUNT MANAGEMENT. Choose the Account number and select Change beside Option level.

To place a Canadian multi-leg option order that includes a stock leg, or more than two option legs, please contact the trade desk at 1.866.980.9590. The trade desk is available Monday to Friday, 8:30 a.m. to 4:30 p.m. ET.

Strategy Margin Requirement
Long calls and puts 100% of the market value
Long straddle/Long strangle 100% of the option strategy’s market value.
Short covered call (protected short) The value of either 1 or 2, whichever is greater:
1. The sum of:
a. 100% of the market value of the call option.
and
b. The lesser of:
i. The normal margin required on the underlying security.
or
ii. The out-of-the-money amount of the call option, plus the market value of the call option, minus any in-the-money amount of the call option.
2. 5% of the market value of the underlying security
Long married put The value of either 1 or 2, whichever is greater:
1. The sum of:
a. 100% of the market value of the put option.
and
b. The lesser of:
i. The normal margin required on the underlying security.
or
ii. The out-of-the-money amount of the put option, plus the market value of the put option, minus any in-the-money amount of the put option.
2. 5% of the market value of the underlying security
Strategy Margin Requirement
Long covered call The in-the-money amount of the call option,
minus the market value of the call option.
Plus
The value of either 1 or 2, whichever is greater:
1. The lesser of :
a. The margin required on the underlying security.
or
b. The margin required on the aggregate exercise value.
2. 15% of the market value of the underlying security.
Short married put (Covered put) The normal margin requirement for the underlying short security.
Long collar The value of either 1 or 2, whichever is greater:
1. 100% of the market value of the long put options,
minus 100% of the market value of the short call options,
plus the difference (+/-) between the aggregate exercise value of the long put options (or the short call options), whichever is higher, and the market value of the underlying security.
2. 5% of the market value of the underlying security.
Short collar The value of either 1 or 2, whichever is greater:
1. 100% of the market value of the long call options,
minus 100% of the market value of the short put options,
plus the difference (+/-) between the aggregate exercise value of the long call options (or the short put options), whichever is higher, and the market value of the underlying security.
2. 5% of the market value of the underlying security.
Strategy Margin Requirement
Long/short vertical call/put
Long calendar call/put *
Long diagonal call/put *

*Long calendar and diagonal strategies with European options have different margin requirements.
Please see level 4 for details.
100% of the market value of the spread.
Plus
The value of either 1 or 2, whichever is greater:
1. The lesser of :
a. The normal minimum margin requirement for the short option,
plus market value of the short option.
or
b. The spread loss amount, if any, that would result if both options were exercised.
2. 5% of the spread loss amount, if any, that would result if both options were exercised.
Long butterfly
Long condor
The value of either 1 or 2, whichever is greater:
1. The cost of the long options, minus the proceeds of the short options.
2. 5% of the spread interval amount between the strike price of the long options and the short options.
Short butterfly
Short condor
Short iron butterfly
Short iron condor
The value of either 1 or 2, whichever is greater:
1. The spread interval amount between the strike price of long options and short options,
plus the cost of the long options,
minus the proceeds of short options.
2. 5% of the spread interval amount between the strike price of the long options and the short options.
Long iron butterfly
Long iron condor
100% of the option strategy’s market value.
Strategy Margin Requirement
Short calendar call/put
Short diagonal call/put
Long/short calendar call/put with European options
Long/short diagonal call/put with European options
100% of the long option’s market value.
Plus
For the short option, the value of either 1 or 2, whichever is greater:
1. A percentage of the market value of the underlying security, determined using the following values:
a. For equity options, or equity participation unit options, the margin rate used for the underlying security.
b. For broad based index options, 10%.
c. For narrow based index options, 15%.
d. For major currency options, 10%.
e. For non-major currency options, 30%.
minus
Any out-of-the-money amount associated with the option.
Or
2. Either a or b, depending on whether it’s a short call or short put position:
a. In the case of a short call option position, the market value of the underlying security, multiplied by 5% (2% for index options).
b. In the case of a short put option position, the aggregate exercise value of the option, multiplied by 5% (2% for index options).
Short straddle
Short strangle
The greatest of:
A. the short put requirement
B. the short call requirement
C. the excess of the aggregated exercise value of the put option over the aggregate exercise value of the call option.
Short option (naked option) The value of either 1 or 2, whichever is greater:
1. A percentage of the market value of the underlying security, determined using the following values:
a. For equity options, or equity participation unit options, the margin rate used for the underlying security.
b. For broad based index options, 10%.
c. For narrow based index options, 15%.
d. For major currency options, 10%.
e. For non-major currency options, 30%.
minus
Any out-of-the-money amount associated with the option.
Or
2. Either a or b, depending on whether it’s a short call or short put position:
a. In the case of a short call option position, the market value of the underlying security, multiplied by 5% (may be higher for certain securities).
b. In the case of a short put option position, the aggregate exercise value of the option, multiplied by 5% (may be higher for certain securities).

Precious metals

Metal Margin requirement
Gold 20%
Silver 30%

Margin Call

If your equity balance drops below your account’s total margin requirement (you have negative maintenance excess), a margin call will be issued for your account. Questrade will give you the opportunity to satisfy the deficiency on a best effort basis. However, Questrade may liquidate or close your positions if you fail to comply with the terms of the margin call, including, in some cases, without notifying you first.

The terms of a margin call are determined at the discretion of Questrade. If you do not fully understand the terms of your margin call, promptly contact Questrade client services. When a margin call occurs, you have four choices:

  1. Deposit more money into your account.
  2. Liquidate or close positions in your account.
  3. Cancel pending orders to open a position.
  4. If you have a TFSA account at Questrade, use Margin Power to link the assets in your TFSA to your margin account.

Currency exchange

In margin accounts, Questrade will not automatically exchange currencies. Typically, you must initiate all conversion proceedings.

For example:

  • If you buy U.S. securities and you do not have sufficient USD, you are borrowing the money from Questrade.
  • You are charged interest on the amount you borrow.

To convert funds, log in to Questrade and make an exchange funds request.

Securities concentration

If the market value of a position in your margin account exceeds your equity, you have a concentrated position. In some cases, if you are too concentrated on a position, Questrade will increase the minimum margin requirement or request that you reduce the position.

Associated Risks

There are significant risks when trading on margin. Prior to trading on margin please review the obligation to maintain margin under section 1.14 and margin risk disclosure under section 1.15 of Questrade's account agreements and disclosure document. For more information on Canadian regulatory margin requirements please refer to the Investment Industry Regulatory Organization of Canada (IIROC).

With an FX & CFD account at Questrade:

  • You can trade currency pairs
  • You can trade commodity and index contracts for difference (CFD)

Margin requirements

The margin requirement for an FX or CFD position is based on a percentage of the value of the trade (in the currency of the account) when the trade is initiated. It is the amount required to open and maintain a position.

FX margin requirement example

QuestradeFX Global

If you buy one micro lot 1,000 of USD/CAD at 1.33479.The notional value in Canadian dollars is $1,334.79. The margin requirement for USD/CAD is 2.5% of the notional value of the trade in a Canadian dollar based account.

Therefore, the margin requirement when the trade was opened is calculated as:

$1,334.79 X 0.025 = CAD $33.37
If the bid price of USD/CAD increases to 1.3383 then the margin requirement for the position will become:
$1,338.30 X 0.025 = CAD $33.46—an increase of $0.09 from the initial margin requirement.

CFD margin requirement example

QuestradeFX Global

If you sell one S&P 500 contract at 2350. The notional value of the trade in USD $2,350.00. The margin requirement for the S&P 500 is 3.5% of the notional value of the trade in a USD based account.
Therefore, the margin requirement when the trade was opened is calculated as:

$2,350.00 X 0.035 = USD $82.25.
If the ask price of the S&P500 decreases to 2300 then the margin requirement for the position will now become:

$2,300 x 0.035 = USD $80.50—a decrease of $1.75 from the initial margin requirement.

Calculating margin

QuestradeFX Global

The margin requirement is dynamic and updates in real time. You can view the margin requirement of a specific FX or CFD instrument on the trade ticket or by clicking Account, and then navigating to Trading Conditions on the menu and searching a specific instrument. The margin utilisation bar at the bottom of the trading platform indicates the percentage of your cash balance reserved for your margin positions.

Margin Call

QuestradeFX Global

If your margin utilisation exceeds 100%, your account is in a margin call. To meet your margin call you are required to deposit funds into your account and/or close positions. Your platform will display pop up messages when your margin utilisation reaches 100% and 150% to remind you of your margin call.

Automatic liquidation threshold procedure

When your margin use increases past a certain threshold, Questrade will automatically liquidate your positions. This will occur automatically regardless whether you have been notified of the margin call or are waiting for your deposit to be completed into your account to satisfy the margin call. There may also be other market conditions that also require us to immediately close positions to satisfy the margin call.

QuestradeFX Global

If your margin utilisation exceeds 200% or your account remains in a margin call for 120 consecutive trading hours (5 consecutive trading days), all of your open positions will be closed.

Note: the time period between Friday at 5 PM ET and Sunday at 4 PM ET does not count toward the 120 hours.

Associated Risks

Trading FX & CFDs on margin carries a high degree of risk because it allows you to speculate on currencies, commodities and indices on a highly leveraged basis. Before trading FX&CFDs we strongly recommend you read more about leverage and risk.


Interest rates

Interest is based on an annual rate, calculated daily and charged or credited to the account midway through the following month. Interest accrues on overnight debit or credit balance, and is charged or credited to the account midway through the following month.

The following rates apply on overnight balances and are subject to change without notice.

CAD Prime (as of September 16, 2017) 3.20%
USD Prime (as of June 28, 2017) 4.25%

Debit (Payable by client for margin)

Credit (Payable to client on cash balance)

The minimum rate for credit is 0.00%. Questrade will never charge interest for carrying a balance.

How security settlement dates affect interest

Interest rates apply from the date the trade of the security settles, which is two days after the date of the trade for stocks (known as T+2 business days), and one day after the date of the trade for options (known as T+1 business day).

Example:

  • If you buy stock ABC on Wednesday, May 1 the settlement date will be Friday, May 3 (T+2 business days).
  • If you sell the same stock ABC on Thursday, May 2, the settlement date will be Monday, May 6 (T+2 business days).

Therefore, in this scenario, you will have been borrowing funds for three days—from Friday, May 3 (the day your buy trade settled) to Monday, May 6 (the day your sell trade settled).

Note:

  • You will be charged interest if your amount owing is over $1.00 for the month.
  • Margin accounts will earn interest if your amount owing is over $10.00 for the month.
  • Registered accounts will earn interest if your amount owing is over $0.01 for the month.
  • Balances are calculated using the average daily debit/credit balance for the interest period.

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