Please note that the following answer only applies to clients of our Broker offering residing in Germany.
Your securities serve as collateral for the loan used. These securities may fall in value or become worthless. This may necessitate early repayment of the loan and/or the sale of securities. Please be aware of the particular risk of loan-financed investments.
A price slide on the market can cause individual or all securities in the securities account to lose value. This automatically reduces the amount available as a loan (credit line), as there is less collateral in the securities account.
If the loan amount used exceeds the credit line, the loan must be repaid (at least in part). This can be done by making deposits or selling securities, which may result in price losses being realised. Alternatively, the credit line can also be increased by switching from securities with low loan-to-value ratios (e.g. derivatives) to instruments with higher loan-to-value ratios (e.g. ETFs).
If clients fail to meet the obligation to settle the overdraft of the credit line, Scalable Capital may sell individual or all securities positions in order to repay the utilised credit amount and, if necessary, terminate the account including the credit. The outstanding loan amount is due for repayment immediately upon termination. Interest may be charged for the overdraft and, if applicable, default interest.