Through margin and 2DC (2days-credit) accounts which are the only existing tools for providing leverage in the Hellenic spot-market, investors may leverage their funds.
The margin account refers to the company’s capability of binding the so-called “security portfolio”, on which the investor is given purchasing power. Based on the weightings of assets of the security portfolio (margin plan), its weighted valuation and consequently the purchasing power of the investor is being calculated. There is no time limit for retention, however the predetermined leverage limits must be covered at all times. The company's margin plan has emerged by studying the liquidity of securities, their dispersion, volatility, capitalization, trading class, as well as quality factors. It is reviewed on a regular basis but also on an ad hoc basis if deemed to be appropriate.
The 2DC account, refers to the entitlement of the investor to create a debit balance (through the purchase of securities) for 2 days without the obligation to pay, provided that he sells within that period and covers the “debt balance”. The utility of 2DC lies in the facilitation of short-term movements.
Significant part of funds required for financing 2DC and margin trading are disbursed from the company's own funds. At the same time, collaborations with Eurobank and Bank of Attica are in place for extra use of margin accounts.
Alternatively, leverage in stocks and indices is also possible through derivatives. These products have completely different characteristics from stocks or mutual funds, as well as higher leverage rates. It is worth noting that leveraging an investor's capital carries an increased risk of capital loss and must be used very carefully.