Part 1: Understanding A RakuMargin Account

RakuMargin 101  

 
 

 

RakuMargin is an account that allow you to trade (buy/sell on Bursa Malaysia) using available funds and/or with a pre-approved facility limit powered by Kenanga Investment Bank Berhad. It operates like a credit card.

 

But why is it called a third party margin account?? It’s because it’s a loan facility developed by Kenanga Investment Bank Berhad, designed exclusively for our Rakuten Trade digital savvy clients.

 

 

Key characteristics of a RakuMargin Trading Account:

  • 100% online trading experience
  • Auto facility limit of RM100,000 [Pro tip: You may request higher facility limit via your dashboard]
  • Loan facility extended by Kenanga Investment Bank Berhad
  • Account approval within 72 hours
  • Same low brokerage rates from RM7 to a maximum of RM100
  • 6.8% p.a interest on outstanding balance
  • 0.5% rollover fee
 

  

Glossary:

1.Facility limit is the amount that we are prepared to lend you when you trade via your RakuMargin account.  The default facility limit of RakuMargin account is RM 100,000.

2.Outstanding is defined as items that are owed by you such as financed shares, contra loss, debit interest etc.

3.A rollover is when a position is extended beyond the end of the trading day without settlement. A flat rate of 0.5% on the principal buy outstanding amount on the expiry of each rollover period.

 

How To Determine Your RakuMargin Trading Limit?

Generally, to trade via a Margin account, you need to know your trading limit. With the RakuMargin Account, the trading limit is determined based on the collateral (pledged cash and marginable shares).

Example 1: No outstanding balance

Example 2: With outstanding balance

Option 1: 

Option 2: Margin Facility Limit – Gross Outstanding Balance

 

 

*Option 1 or 2 whichever lower implies.

**MOF stands for Margin of Financing. A percentage of the collateral value pledged to secure the loan.

 

How to Calculate A Rollover Fee?

A rollover is when a position is extended beyond the end of the trading day without settlement. A flat rate of 0.5% on the principal buy outstanding amount on the expiry of each rollover period. The rollover period for RakuMargin is 3 months.

How do you settle the rollover fee? It’ll be auto deducted from the available cash balance in your RakuMargin trading account at the end of the 90th trading day. If there is no cash balance to offset, the rollover fee will remain as an outstanding amount.

Example: If you have outstanding purchases of RM10,000, the rollover fee will be RM50.00.

 

How To Calculate The Interest On Your Margin Outstanding Balance?

Interest on outstanding transactions are at 6.8% per annum. It’s calculated daily after T+2, at the end of each day. The interest on outstanding balance will be realized at the end of the month.

 

How to Request A Higher Facility Limit?