Multi-asset trader Saxo Capital Markets has expanded its functionality to allow clients to post existing physical stocks, bonds and ETF holdings as collateral for margin trades.
The company said the inclusion of the new features was intended to “increase trading opportunities for sophisticated investors with existing long-term holdings” without the need for additional cash when trading products such as contracts-for-difference, foreign exchange futures and options.
“Using physical stocks, bonds and ETFs as collateral for CFDs and other margin trades allows investors to activate dormant holdings without having to sell positions in order to generate cash,” said Saxo Capital Markets Australia chief executive Ben Smoker.
“This is an attractive proposition, given that some investors previously had to crystallise some capital gains to generate collateral for margin trading; with this initiative, investors have an alternative pathway with the additional benefit of also being more tax efficient.”
Mr Smoker said the changes more accurately reflect the needs of long-term investors.
“These enhancements are in line with the underlying trend of long-term Australian investors who are now using satellite active portfolios, which complement their longer-term core positions,” he said.