[SINGAPORE] Several brokerages across Singapore observed up to double the number of margin calls and stopouts on such trades in April after US President Donald Trump administration’s “Liberation Day” tariffs roiled markets globally.
Margin trading allows investors to borrow funds from brokerages to buy more stocks than they can afford with their own capital, using their existing portfolio as collateral. Interest rates for borrowed funds typically range from 3 to 6 per cent per annum across brokerages in Singapore.
If the value of the position falls below a certain threshold, the brokerage will issue a margin call, asking the investor to deposit more funds or sell off assets to restore the required margin ratio.
Similarly, FSMOne Singapore reported 50 per cent more margin calls in April compared to preceding months. While there were a few instances of forced liquidation on FSMOne investors in April 2025, these were “not significant” as the investors managed to cover their margin calls requirement on time, said Joshua Chim, general manager of FSMOne Singapore.
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Meanwhile, OCBC Securities saw double the number of margin calls that month. However, there were no margin deficit losses that month, suggesting that most investors were able to meet their obligations, said its managing director Wilson He.
However, DBS said its brokerage did not observe a significant increase in margin calls in April. “This can be attributed to our customers being not only prudent in managing their borrowings, but also in providing sufficient buffer to cushion market movements,” said a spokesperson for DBS.
Margin calls typical of volatile periods
Mahesh Sethuraman, the Singapore chief executive officer of Saxo, said that while Apr 7 – the first trading day after Trump’s tariff announcement – was an “extraordinary day” for global markets, the surge in margin stopouts at Saxo that month was “not out of proportion” for similarly volatile months.
The last time Saxo had experienced a similar proportion of stopouts was in October 2024, just before the US presidential election, said Sethuraman.
Similarly, OCBC’s He said that the temporary rise in margin calls at OCBC Securities was consistent with broader market corrections.
Brokerages said that most investors affected by margin calls and stopouts in April were “seasoned” traders who typically have several years of trading experience.
At FSMOne Singapore, margin traders are accredited investors with higher net worth or income and have more than three years of investing experience. They also have more than 70 per cent of their holdings in the US stock market.
Such investors are more aware of the risks involved in margin trading. They are also more resilient to market fluctuations and margin calls, said FSMOne Singapore’s Chim.
Likewise, OCBC’s He said that margin trading requires “a higher level of sophistication and risk tolerance”. The bank’s trading representatives were also proactive in appraising at-risk clients of the situation.
Sethuraman said that Saxo’s clients – who are typically experienced traders – “more than made up” for the losses after the US market improved in May 2025. He observed that investors reduced their holdings in artificial intelligence and tech stocks, and turned towards more defensive stocks after the US tariffs were imposed.
Similarly, many of FSMOne Singapore’s investors who incurred losses in April reduced their losses or broke even in May.
What investors can do
During such periods of volatility, experts said that investors engaging in margin trading should have a “game plan” in mind.
Chim of FSMOne Singapore said that investors using margin should know when to cut their losses and have the discipline to do so if certain price levels are breached.
To prevent margin calls, Lorna Tan, head of financial planning literacy at DBS, advised investors to avoid over-leveraging. For example, while the margin may allow up to 70 per cent financing, an investor can opt to use a margin of 50 per cent or lower. They should also maintain a sufficient buffer in their accounts to cover potential losses.
Said Tan: “Be it investing with cash or leveraging a margin loan, holding power is key to investing.”
