Why Does Your Available Trading Limit Decrease?
•By Mahersaham Team
Artikel ini juga tersedia dalam Bahasa Melayu
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Many people are puzzled and wonder why their Available Trading Limit decreases every time they deposit money into their Trading Platform.
Is there a deposit charge? How much does the broker charge? Where does the deducted money go?
This article will explain where a portion of your deposited amount goes and why it decreases.
Before that, all explanations regarding Account Summary and other details in this article refer specifically to the Mplus broker only.
When you log into your Platform, go to the Account Summary section. You will see these 8 items:
First, you need to understand these 8 items in the Account Summary.
This is because every time a deposit, withdrawal, buy, or sell transaction occurs, your funds will appear in these sections.
To understand more about Account Summary, you can read How to Read Account Summary Easily.
So here, the meaning of Trust Account and Available Trading Limit is:
The Trust Account is the actual value of money you have at that point in time.
The Trust Account may take a bit longer to update because Bursa has a settlement rule of T+1 and T+2 for the system to process brokerage charge deductions.
In simple terms, it is the value or amount of money you can use to trade on Bursa Malaysia. It will differ slightly from the value shown in the Trust Account.
For example, if your Available Trading Limit shows RM5,000, then your Trust Account should show a higher amount due to the T+1 and T+2 settlement mentioned earlier, as well as the brokerage system updates for previous transactions.
So for stock trading, you should only focus on the Available Trading Limit. That is the amount you can use to buy stocks.
From the total amount deposited, Mplus will limit your trading transactions based on the calculation of 99.5% minus RM40 as your Trading Limit, which is the amount you can use to trade.
Meanwhile, 0.5% of the deposit amount will be kept in the Trust Account as the Mplus Reserve.
This reserve is not a charge imposed by the Mplus broker, but rather serves as a safeguard. If in the future you wish to close your account, the reserve amount will be returned to you in full.
The concept is similar to opening a bank account, where the bank requires a minimum balance of RM20 to keep the account active.
For example, Mak Kiah deposits RM1,000 into the platform. The amount she can use for trading is:
Available Trading Limit = (99.5% x Deposit Amount) - RM40
= (99.5% x RM1,000) - RM40
= RM955 is all Mak Kiah can trade with.
In the second example, Pak Mail deposits RM10,000 into the Platform. His Trading Limit is:
Available Trading Limit = (99.5% x RM10,000) - RM40
= RM9,910 that Pak Mail can use to trade.
In the third example, Minah deposits RM5,000 into the Platform. The amount she can use for trading is:
Available Trading Limit = (99.5% x RM5,000) - RM40
= RM4,935 that Minah can use to buy stocks.
So this is how the calculation works every time you deposit money into your Trading Platform.
The Trust Account remains unchanged. It reflects the same amount as your deposit.
The Available Trading Limit will decrease slightly based on the calculation explained above.
If you do not have a CDS account yet, you can register for a CDS account with us.
You can also start by downloading the free ebook from Mahersaham.
If you want to learn the ''copy & trade'' technique using the Bursa Marketplace platform, head over here.
Your Available Trading Limit decreases because Mplus applies a formula of 99.5% of your deposit minus RM40. The 0.5% is kept as a reserve in your Trust Account. This is not a fee -- it is fully refundable if you close your account in the future.
The Trust Account shows the actual total amount of money you have, whilst the Available Trading Limit shows the amount you can actually use for trading on Bursa Malaysia. The Trust Account value is typically higher due to T+1 and T+2 settlement rules and brokerage system updates.
The formula is: Available Trading Limit = (99.5% x Deposit Amount) - RM40. For example, if you deposit RM1,000, your Available Trading Limit would be (99.5% x RM1,000) - RM40 = RM955.
Yes, the 0.5% reserve amount will be returned to you in full if you decide to close your trading account in the future. It functions similarly to a minimum balance requirement in a bank account.
Do not have a CDS account yet? Open a CDS account with Mahersaham and start your stock trading journey today.
New to the stock market? Download the free Asas Saham ebook from Mahersaham to get started!