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Q1: What is a Contract for Difference (CFD)? Back to top
 
A CFD is an agreement between two parties to settle, at the close of the contract, the difference between the opening and closing prices of the contract, multiplied by the number of underlying shares specified in the contract.



Q2: How do I open a CFD account? Back to top
 
You may contact your Trading Representative or call personally at our office at 20 Cecil Street #09-00, Equity Plaza, Singapore (049705).



Q3: How long does it take to open a CFD account? Back to top
 
A CFD account will be opened within 2 working days from the date you sign the CFD documents. A minimum cash deposit of S$2,000 is required before you can commence trading.



Q4: Can I pledge shares as collateral? Back to top
 
Yes. You can pledge a combination of cash (minimum S$2,000) and share collateral (minimum S$10,000). Cash deposit placed must be 10% of the market value of share collateral. For example, if you pledge shares with a market value of S$30,000, the required cash deposit is $3,000.



Q5:
What are the shares that I can pledge? Back to top
 
You can pledge most of the counters traded in the SGX Mainboard and Catalist. Please refer to LTS's Non-Marginable Securities List for shares that cannot be pledged.


Q6:
Can I sell the shares I pledge as collateral in my CFD account? Back to top
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Yes. However, you have to sell the shares through your Cash account and inform your Trading Representative to amend the sales to your CFD account on trade day. The sales proceeds will be credited to your CFD account


Q7:
How much can I trade initially? Back to top
 
You can trade up to 5 times the amount of cash deposit and/or marginable securities



Q8:
What are the counters available for trading under LTS CFD?
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The list of CFD counters available for CFD trading can be downloaded here.



Q9:
Are there any counter limit restrictions? Back to top
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Yes, please monitor all orders to ensure strict compliance with the following counter limit restrictions.
(Note: Pre-trade check facility is not available in the current trading engine)

CFD Trading Limit

Long Position Per Counter

Short Position Per Counter

Qty

Value

Qty

Value

Up to $100,000

250,000

$40,000

250,000

$40,000

> $100,000

500,000

40% of CFD trading limit or $100,000 whichever is lower

250,000

$40,000

If your CFD A/c is tagged to a Trading Representative, please check the applicable limit restrictions with your Trading Representative.




Q10:
Can my CFD trades be in the queue? Back to top
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Yes. Queuing is allowed for CFD trades. Once you have keyed in the order, you will see the order status as "Pending" in "Today's Orders".



Q11:
Why does the status sometimes change from "Pending" to "Rejected"? Back to top
 
This happens when the CFD trade is not accepted by Lim & Tan Securities.



Q12: Can my CFD trades be partially filled? Back to top
 
Yes. Your CFD trades may be fully filled or partially filled. You will see the order status as "Filled" or "Partially Filled" respectively in "Today's Orders" during market hours .



Q13: Can I withdraw my CFD trades?
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Yes. You can withdraw a CFD trade that is not filled. For partially filled orders, you can only withdraw the balance quantity as reflected in "Today's Orders".



Q14: In what order are my CFD trades squared off? Back to top
 
CFD trades will be closed out on a First-In-First-Out (FIFO) basis.

E.g.
Day 1 Buy 6 lots of DBS
Day 5 Buy 4 lots of DBS
Day 10 Sell 8 lots of DBS

The 6 lots bought on Day 1 would be squared off first, followed by the 2 lots bought on Day 5. Hence, you will hold a net 2 lots long DBS position. 



Q15: Can my CFD trades be partially closed?
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Yes.

E.g.
Day 1 Sell 5 lots of DBS
Day 10 Buy 2 lots of DBS

Your client position will reflect a balance of 3 lots of DBS



Q16: What is the Contract Value of a CFD?
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It is the number of underlying shares in the contract multiplied by the price of the underlying security.



Q17: What are the charges* involved in trading CFD? Back to top
 

Brokerage tier for Online CFD Trades:

Contract Size

Brokerage Rates *

Min. Brokerage

S$25

Up to S$20,000

0.22%

>S$20,000 to S$50,000

0.18%

>S$50,000

0.15%

           
Brokerage tier for CFD Trades placed through your Trading Representative:

Contract Size

Brokerage Rates *

Min. Brokerage

S$30

Up to S$20,000

0.35%

>S$20,000 to S$50,000

0.30%

>S$50,000

0.25%

 

  • For opening a long position, the finance charge of 6.5% per annum will be levied. (The interest-free period will be up to T+3 market days.)
  • For opening a short position, the finance charge of 4% per annum will be levied. (The interest-free period will be up to T+3 market days.)
  • For all closing positions, the brokerage charge will apply.

* Charges are subject to change from time to time.



Q18: How long can I keep a position open?
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Each LTS CFD has a tenure of 30 days. You have the option of closing off your position on or before expiry date depending on your view of the price of the underlying security. The CFD contract has to be closed off on or before the expiry date, otherwise a rollover will be initiated.



Q19: What happens when a rollover is initiated?
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A new contract will be created, based on the last done price of the underlying share on the expiry date. Commission and finance charge on the new contract will be levied. If an expiry date falls on a weekend or public holiday, the effective expiry date shall be on the market day before the weekend or public holiday.

Note: The interest-free period is not applicable to rollover contract.



Q20: How do corporate actions on the underlying security affect my CFD Account?
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Your CFD account will only be adjusted in respect with cash dividend attributable to the underlying security as follows:
(a) If you hold a CFD long position, LTS shall credit the net dividend to your CFD account
(b) If you hold a CFD short position*, LTS shall debit the gross dividend from your CFD account
* You are required to close off any open CFD short positions when the dividend attributable to the underlying security of any CFD is payable in a currency other than Singapore Dollars.

For all other corporate actions, you are required to close off any open CFD positions as follows:
Long CFD position: 3 market days before ex-date
Short CFD position: 7 market days before ex-date
Notwithstanding the foregoing, LTS reserves the right to close all open positions relating to the underlying security before the ex-date for any corporate actions.




Q21: How will I be notified of my CFD trades?
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A confirmation advice will be sent to you. In addition, you will receive a monthly statement reflecting all CFD transactions and fees charged to your CFD account.



Q22: What is the interest charged on a debit balance in the CFD account?
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8% per annum on a daily rest will be charged on a debit balance. You will be required to settle all outstanding debit balance upon receipt of the monthly statement.



Q23: What is the margin percentage to be maintained?
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You must maintain a margin percentage of at least 20%. No new positions are permitted unless additional collateral is furnished to bring the margin percentage to not less than 20%.

The margin percentage is computed as follows:

        Total Equity
----------------------------        x     100%          =      Margin Percentage
Market Value of Portfolio

Definition:
Total Equity = Ledger Balance* +/- Unrealised Profit/Loss + Market Value of Collateral Shares - Accrued Finance Charge - Accrued Debit Interest
Market Value of Portfolio refers to the market value of all outstanding CFD positions.
* Ledger balance = Cash Deposit - Commission (inclusive of GST) - Realised Finance Charge +/- Realised Credit/Debit Interest +/- Realised Profit/Loss




Q24: Can I withdraw cash or share collaterals from my CFD account? Back to top
 
You may withdraw cash or share collateral from your CFD account, provided after the withdrawal, your margin percentage is above 20% and the ledger balance is above 10% of the market value of your share collateral.



Q25: When is a margin call made? Back to top
 
A margin call is made when the margin percentage falls below 20%.



Q26: When do I need to top-up my CFD account? Back to top
 
You need to top-up your account within two market days from the date of the notice. For example, if the margin call is made on a Monday, you are required to top-up by Wednesday.



Q27: How do I top-up my CFD account? Back to top
 
You will need to provide additional margin of cash and/or marginable securities to bring the margin percentage to not less than 20%. For top-up of marginable securities, you are required to place a cash deposit of at least 10% of the market value of the share collateral.



Q28: What happens if I am unable to top-up? Back to top
 
LTS shall have absolute discretion and without further notice to you, liquidate the CFD account, including the shares deposited as collateral, to bring the margin percentage to not less than 20% if the margin requirement is not met within two market days of the margin call.



Q29: When will force-selling take place? Back to top
 
Force-selling shall take place when the margin percentage falls below 10%. LTS has the right to liquidate your collateral shares and/or close off all or any outstanding CFD positions to bring the margin percentage to not less than 20%. In a volatile market, you are required to monitor your position closely and if you do not wish to be sold-out, you are required to top-up with cash by 12 p.m. on the force-selling day.



Q30: Are there any administrative charges? Back to top
 
There is no processing fee to open a CFD account. Charges by CDP are maintenance fees for your Depository Agent (DA) Sub-Account on a quarterly basis and fees for share transfer between your Global Securities Account (GSA) and DA Sub-Account. The maintenance fees may be waived depending on the amount traded for that quarter. Charges by LTS include handling fees for dividend distribution.

Please click here to download a copy of the Schedule of Charges.

Q31: Are CFD accounts eligible for Rewards programmes?
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CFD accounts are currently not eligible for the limtan Reward Points and NTUC Link Points programmes.



Q32: What is the CFD trading hours? Back to top
 
The trading hours is between 8.30 am to 5.05 pm.

Please note that with effect from trade date 4 Nov 2008 (starting from evening 3 Nov 2008), overnight orders to initiate short positions will not be accepted. Orders to initiate short positions can be placed only during trading hours.

Overnight orders to close off outstanding positions and initiating of long positions can be placed through the Online Trading system for the next trading day from 5.12 pm onwards. If you are placing an overnight sell order to close off an outstanding long position, please ensure the quantity for your sell-to-close order is not more than that of the open buy position.

Note: Orders placed by clients will still be subject to acceptance by Lim & Tan Securities Pte Ltd. Orders placed at or near the end of trading hours may not be accepted and executed.



Q33: Who can I contact for assistance? Back to top
 
You can contact your Trading Representative, our Helpdesk on +65 6799 8188/180 or CFD Department on +65 64370139/120/147/165.