Margin Loans

If you want to buy securities, then you have two options for payment. You can pay the full cost due at once, or borrow part of the purchase price from StateTrust. If you decide to borrow cash from us, then a margin account is set up for you. Any securities that you buy become our collateral for the cash that we lend you. If the securities in your account lose value, the value of the collateral for your loan also goes down. If this happens, StateTrust can take several actions to maintain the required equity in your account(s) including issuing a margin call (for the sale of assets), and/or selling securities or other assets that you hold.

Trading securities on margin involves taking several risks:

		You can lose more money than what was deposited in the margin account. If the securities that you bought on margin lose value, you may have to give StateTrust more money to avoid the forced sale of those securities or any other securities or assets held in your account(s)
		Once you set up a margin account, StateTrust has the authority to sell securities or any other assets held in your account(s). If your account balance falls below the maintenance requirements for the margin account, or StateTrust’s higher “house” requirement, StateTrust has the power to sell the securities or any other assets in your account(s) to cover the margin deficit. And the liability for any shortfall in the account(s) after the sale rests with you. Loan Size Charged Base Rate Spread Margin Rate Under $25,000 4.625% 2.50% 7.125% $25,000 to 49,999 4.625% 2.00% 6.625% $50,000 to 74,999 4.625% 1.50% 6.125% $75,000 to 99,999 4.625% 1.00% 5.625% $100,000 and up* 4.625% 0.75% 5.375% *Amounts above $500,000 may qualify for lower rates.
		StateTrust can sell your securities or any other assets without contacting you first. We will make every attempt to notify you about the margin call, but we are under no obligation to do so.
		You cannot decide which securities or other assets in your account(s) will be sold or liquidated to meet a margin call. Since the securities are considered collateral for your original margin loan, StateTrust has the authority to decide what to sell off.
		StateTrust can increase its “house” maintenance requirements for margin accounts at any time we choose—we are not required to give you advance written notice. Any changes in our policy can often take effect instantly and might result in the issuance of a maintenance margin call.
		You are not entitled to an extension of time on a margin call. StateTrust may, under specific conditions, grant extensions so you can meet your margin requirements, but we are not required to provide our clients with them.