Derivatives Trading Process at Pinetree - Pinetree Securities

Derivatives Trading Process at Pinetree

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Derivatives Trading Process at Pinetree

Step 1: Open Account

Investors need to open stock trading account first, then open derivatives account. Please refer the detailed guidance here.

Step 2: Deposit initial margin (IM)

Customers need to deposit an amount of money in order to place order. The Initial Margin – IM is calculated as follows:

  • IM = IM = (IM ratio/ Margin Maintenance Ratio)x Multiplier Factor x No of Contract x Current Price
    • IM rate is regulated by VSDC, currently 17%
    • Margin Maintenance Ratio specified at Pinetree according to Pinetree’s policy from time to time, assumed to be 85%
    • The multiplier of the VN30 index futures contract is 100,000
    • Suppose the Customer plans to buy 1 futures contract on the VN30 index, the current price is 1120, the Customer needs to deposit a minimum amount = (17%/85%) * 100,000 * 1 * 1120 = 22,400,000
  • How to deposit money into TKPS at Pinetree:
    • Method 1: Customers deposit money into the securities account (SC) and transfer money from the SC to the derivative account according to the instructions here.
    • Method 2: Customers set the default account to Derivative account, then deposit money into the SC as instructed in the link above. After setting the default account, every time the Customer transfers money to the SC, the money will automatically be accounted into the derivatives account.

Step 3: Place order

Investors can place normal or conditional orders on the regular order board or the quick order board (shortcuts are supported) on Pinetree’s trading platforms. Please refer to detailed instructions here.

Step 4: Monitor AR during trading hours

Investors need to monitor the ratio of using margin assets (AR) during the trading hours to ensure it’s not higher than Level 1.

  • For detailed examples of margin ratio management, please check it here.
  • Regulations on Pinetree’s AR ratio, please check it here.

Step 5: Daily profit/loss settlement

  • Derivatives transactions are settled on a daily basis:
    • If there is a net loss: Investors have to pay in full all losses incurred before 9:30 am T+1
    • If there is a net profit: Pinetree will fully pay the profit within T+1.
  • If the investor fails to pay the loss on time, Pinetree will withdraw margin from VSDC and/or close position(s). In case, the loss amount can not be collected at the next trading day (T+1), Pinetree will continue to process on the following trading days. The amount of late payment will be charged interest at the rate of 150%*the margin interest rate at Pinetree.
  • Investors should maintain a certain amount of money on the derivatives account at Pinetree to pay transaction fees and taxes. In case, derivatives account lacks money to pay taxes and fees during the day, the System will automatically withdraw money from the margin account at VSDC. Margin withdrawals will incur withdrawal fees according to the regulations of the Depository Bank.

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