Minimum account balance and deposit at CITIC Securities
This article discusses what the minimum account balance (if required) and the minimum deposit (if required) at CITIC Securities stand for. Find out in which cases you must have a minimum balance at CITIC Securities.
Have you ever accidentally mixed up the minimum account balance with the minimum deposit? Rest assured, you’re not the only one. To prevent any confusion, we'll tell you what they are and how they differ from each other.
CITIC Securities offers margin and derivative trading: You can trade stocks/ETFs on margin, meaning you can borrow money from the broker to increase your trading position. The following derivative products are also accessible:
| CITIC Securities | Interactive Brokers | TradeStation | |
|---|---|---|---|
| Futures | Yes | Yes | Yes |
| Options | Yes | Yes | Yes |
| Forex | No | Yes | No |
| CFDs | No | Yes | No |
Note that most brokers offer several account types. If you open a cash account, you don't have to worry about margin requirements because you can only invest the funds that you deposited in the account. Some brokers don’t even require a minimum deposit for cash accounts. In turn, a margin account allows you to borrow money from your broker so you will have to comply with margin rules.
The minimum account balance is the amount that you're required to maintain on your account when you use leverage/margin in trading. Having this amount available is necessary to avoid negative consequences such as a margin call or the liquidation of your assets. If the amount of funds in your account falls below the minimum account balance requirement, you will have to deposit additional funds.
Bear in mind that it is your responsibility to ensure your account is properly funded. You should monitor your account at least on a daily basis to make sure you always meet your broker's margin requirements. It is not a good idea to wait until you get a margin call, because if you miss it, your broker may liquidate some of your assets and you could end up with considerable losses.
The minimum deposit is the minimum amount required for opening an online brokerage account. While some brokers do not require a minimum deposit, others do. The minimum deposit requirement means that you will need to transfer this amount to your brokerage account from your bank account in order to start trading. You can check the minimum deposit at CITIC Securities here.
The term margin is used widely in the financial world. Note that margin requirements for different asset classes, such as stocks and options, may be different.
There are general margin requirements for all stocks when you trade stocks/ETFs on margin at a US-regulated broker. On the other hand, if you trade derivative assets such as futures or options, the minimum account balance depends on the specific asset you trade as well as the broker’s requirements. In both cases, you have to comply with margin requirements and maintain the minimum account balance at all times.
Minimum account balance at CITIC Securities
Minimum account balance for stock/ETF margin trading
When trading stocks and ETFs on margin, the broker itself determines the minimum account balance you must always maintain in your CITIC Securities margin account.
Minimum account balance at CITIC Securities
Minimum account balance for derivative products
CITIC Securities offers derivative products to its clients:
- Futures
- Options
Futures minimum account balance
CITIC Securities gives access to futures trading. You can trade futures on 4 exchanges.
For futures contracts, futures exchanges set initial margin requirements as a percentage of the contract to be traded. There isn't a legal minimum balance that you have to maintain to day trade futures. When volatility is high, future exchanges may increase margin requirements. The maintenance margin of S&P 500 futures (ticker: ES), for example, stood at $11,000 as of March 1, 2021.
Remember that margin requirements for different asset classes are different.
The futures margin is the amount of money that you must deposit and keep with your broker when you open a futures position. It is not a down payment and you do not own the underlying commodity.The futures margin generally amounts to a smaller percentage of the notional value of the contract, typically 3-12% per futures contract as opposed to up to 50% of the face value of securities purchased on margin.
Source: Global derivatives marketplace CME Group
Options minimum account balance
CITIC Securities provides options on 2 exchanges.
Options trading strategies involve different degrees of risk and complexity. Some riskier trade types, like selling call options on stocks you don't own or writing an uncovered put option, can only be executed if you have a margin account. However, less risky strategies, such as buying a call option, are permitted with cash accounts, too.
Remember that when you trade options, the minimum size is 1 contract, which represents 100 shares of the underlying asset.
Minimum account balance at CITIC Securities
Minimum amount to open an account at CITIC Securities
Good news: the minimum deposit to open a CITIC Securities account is $0. There are brokers that require as much as a couple of thousand dollars. You can check in the table below what is the minimum deposit at the competitors of CITIC Securities.
| CITIC Securities | Interactive Brokers | TradeStation | |
|---|---|---|---|
| Minimum deposit | $0 | $0 | $0 |
Minimum account balance at CITIC Securities
Bottom line
Now you know what the minimum deposit and the minimum balance are at CITIC Securities and you understand the difference between the two. If you want to dig deeper, read our article on margin calls and short selling.
The minimum deposit is the minimum amount required to open a new online broker account.
In turn, the minimum account balance is the amount on your margin account or on your account for trading leveraged products that you’re required to maintain to avoid fees.
Don't forget that your maintenance margin requirement may change constantly and it is your responsibility to keep an eye on it. You should place additional deposits or close some other positions on your account if it is getting too close to the maintenance margin level. You definitely want to avoid getting that dreaded margin call or wait until your broker liquidates some of your assets and positions.
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