Please note that the following answer only applies to clients of our German broker offering.
Your securities serve as collateral for the credit used. These securities may fall in value or become worthless. This may require early repayment of the loan and/or the sale of securities. Please consider the special risk of credit-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 credit (credit line), as there is less collateral in the securities account.
If the credit used exceeds the credit line, the credit 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 be increased, if necessary, 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 you fail to meet the obligation to settle the overdraft of the credit line, the custodian bank may sell individual or all securities positions to repay the credit used and, if necessary, terminate the account including credit. The open credit amount is due for repayment immediately upon termination. Interest on the overdraft and, if applicable, interest on arrears may be incurred.
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 credit (credit line), as there is less collateral in the securities account.
If the credit used exceeds the credit line, the credit 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 be increased, if necessary, 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 you fail to meet the obligation to settle the overdraft of the credit line, the custodian bank may sell individual or all securities positions to repay the credit used and, if necessary, terminate the account including credit. The open credit amount is due for repayment immediately upon termination. Interest on the overdraft and, if applicable, interest on arrears may be incurred.