Macquarie Prime

[ernie]

Hi Folks,

Anyone here use MQ Prime for their share investing/trading? Been reading up on it at the Macquarie website and now would like some feedback from actual users of the product. How does it compare to, say, Comsec? How does the leveraging work? If I gear up to 95%, when do I get a margin call?

Thanks,

E

 

[alexlee]

You're willing to gear 95% LVR in shares, in this market? You're either very very good or..........

 

[ernie]

Alex,

I am trying to understand the product, hence my questions. I understand that in a standard Margin Loan if I go over a share's LVR limit and/or buffer I will get a margin call. For this product that lends up to 95%, I want to know how the margin call (if there is such a thing here) works. If I were asking about margin loans, I would've said something similar, say "If I gear up to 70% LVR, when do I get a margin call". Nowhere did I say that I was willing to gear up to 95% in this market.

Not sure what the intent was behind your reply, but if you have experience with using this product I would be more interested in hearing about that.

 

[FrankGrimes]

Alex.... You are very quick of the block, give the guy a break! He just has some questions.. It is no different to a margin loan really, so even if you can borrow up to 95% people don't have to go this high. It gives you alot more headroom than the traditional 70% (or less any many cases). So when someone mentions to you that they have a margin loan and can borrow up to 70% do you assume they do so?

I moved from a BT margin account linked to Westpac broking. The margin loan was paid out by Mac Bank and balance transferred to Prime, along with the HIN and associated stock. The process was simple and I was well informed during the process. No hiccups or anything. I just needed to supply BT account and HIN.

Took around 1 week for the whole thing to go through. They capped my limit at 250k which BT didn't do.

Gripes

- No free data. Can't look up P/E, EPS growth etc like Commsec/Westpac. The website is very basic. So I still use Westpac for data.
- Trading platform is overkill. The standard BT/Commsec is fine, I find this one a bit slow and not really needed.
- No margin call buffer, so basically once your positions are in breach you have 24 hours to action it.

Good things

- Integrated cash account is a nice bonus, if you ever want to close out your positions you don't have to muck around with ING, bankwest etc
- GSLs are aewsome. Gives me good piece of mind and I know exactly how much I stand to lose in a worst case scenario. So times like now its perfect. GSL is a fixed price stop loss. Ie you set the price and never get less than that.
- 95% on most of the ASX50. So if you gear at say 50% you're pretty safe.
- Interest rate is the lowest of all margin lenders. 9.45%

Even though its called "Prime" its just a margin loan with the same rules and higher LVRs. It also has CFDs, cash account etc integrated. Thats where the "Prime" name comes from..

Hope this helps. Happy to answer anything else.

Grimey

 

[willair]

Hi Folks,

Anyone here use MQ Prime for their share investing/trading? Been reading up on it at the Macquarie website and now would like some feedback from actual users of the product. How does it compare to, say, Comsec? How does the leveraging work? If I gear up to 95%, when do I get a margin call?

Thanks,

E

Ernie,try and find this book by Paul and Jarrod Martin..Margin Lending Explained- a sharebuyers guide to good gearing, maybe have a read of the book before you enter the water and try and swim with all the mud sharks.
I know nothing about MQ Prime,maybe join the Hot Copper fourms and ask the question over there..willair..
imho ..willair http://marketdata.fatprophets.com.au/
http://www.hotcopper.com.au/

 

[ernie]

G'day Grimey!

It is no different to a margin loan really, so even if you can borrow up to 95% people don't have to go this high. It gives you alot more headroom than the traditional 70% (or less any many cases). So when someone mentions to you that they have a margin loan and can borrow up to 70% do you assume they do so?

Have had a margin loan for the last 8 years so am quite familiar with how that works so no of course there is no need to go to max out at say, 70% lending. In comsec's case, if I do max out at 70%, I will get a margin call if that goes over 75%. In MQ Prime's case, if i max out at 95%, do I get the call at say, 100%?

I moved from a BT margin account linked to Westpac broking. The margin loan was paid out by Mac Bank and balance transferred to Prime, along with the HIN and associated stock. The process was simple and I was well informed during the process. No hiccups or anything. I just needed to supply BT account and HIN.

Took around 1 week for the whole thing to go through. They capped my limit at 250k which BT didn't do.

Fast and easy. Sounds good so far. Comsec caps the loan limit as well.

Gripes

- No free data. Can't look up P/E, EPS growth etc like Commsec/Westpac. The website is very basic. So I still use Westpac for data.
- Trading platform is overkill. The standard BT/Commsec is fine, I find this one a bit slow and not really needed.
- No margin call buffer, so basically once your positions are in breach you have 24 hours to action it.

Ah so 95.01% triggers a margin call. Interesting.

Good things

- Integrated cash account is a nice bonus, if you ever want to close out your positions you don't have to muck around with ING, bankwest etc
- GSLs are aewsome. Gives me good piece of mind and I know exactly how much I stand to lose in a worst case scenario. So times like now its perfect. GSL is a fixed price stop loss. Ie you set the price and never get less than that.
- 95% on most of the ASX50. So if you gear at say 50% you're pretty safe.
- Interest rate is the lowest of all margin lenders. 9.45%

Me like

Even though its called "Prime" its just a margin loan with the same rules and higher LVRs. It also has CFDs, cash account etc integrated. Thats where the "Prime" name comes from..

Hope this helps. Happy to answer anything else.

Grimey

Thanks a bunch Grimey (I am a Simpsons fan myself). Certainly looking very good. Been with Comsec since day 1 and have generally been happy with their service but the recent problems they had during heavy trading days has made me realize that I should at least have a 2nd broker.

Cheers,

E

 

[im sparticus]

you will be given an high interest earning cash account which you will deposit money into (and can take from and deposit to as you please via bpay so youll have access to and be able to spend profits before the position is closed, try doing that with a margin loan), to open a position on a stock with a 5% margin requirement 5% of the value of the position will be deducted from your cash account and placed in "margin", differences in the value of the position will be calcuated daily "mark to market" and added/subtracted from/to your cash account when your cash account no longer has enough funds to maintain the position the position will be closed out and you will be responsible for the outstanding if there is any the difference between the any and the margin will the be recredited to your cash account,

you will have to pay interest on long positions for amounts that exeed your cash account and earn interest on short positions all calculated daily and credited/deducted from your cash account

its got nothing to do with lvrs and there are no margin calls

 

[FrankGrimes]

G'day Grimey!



Have had a margin loan for the last 8 years so am quite familiar with how that works so no of course there is no need to go to max out at say, 70% lending. In comsec's case, if I do max out at 70%, I will get a margin call if that goes over 75%. In MQ Prime's case, if i max out at 95%, do I get the call at say, 100%?




E

The part about margin lending was for Alex - he seemed to assume because Prime offers 95% that you were going to gear to this level.. which is not the case as you have pointed out.

There is no buffer, so once you hit your limit you are expected to pay up by adding $ to your "cash account". BT used to be 75% for the stocks in held + 10% buffer before a margin call is triggered. So I have gained about 10% extra + lower interest rate and the other features listed above.

If you are familiar with Commsec this really isn't much different....

 

[kero]

hi folks,

i'm an existing prime customer. Haven't used their margin loans facilities but I quite like their 7% bank rate... no minimum deposit & no account keeping fee. I also used the account for CFD trading. they do offer GSL but at a premium. $10 minimum trading fee... a huge difference with my former internet broker etrade. Haven;t tried buying normal shares with them yet.

so far so happy at the moment.