Plus Accounts (Margin)

A Plus Account (Margin) allows you to trade without limits as long as you have available Buying Power. Additionally, if you choose, it gives you the ability to use funds borrowed from the broker to purchase more assets or make withdrawals without selling positions. Its use is not mandatory.

Many clients hold Plus accounts to access their other benefits without needing to use borrowed funds. The use of margin is a form of financial leverage, where you use a portion of your own money as collateral to access a larger amount.

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Some benefits of Plus (Margin) accounts include:

• Allows you to borrow money for personal use (travel, education, emergencies, debts, etc.)
• Allows you to invest more capital (your own money plus borrowed funds)
• When selling stocks, money is credited immediately to your account for reinvestment in other assets
• No cost to obtain
• No time limit on the loan
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Under U.S. regulation, a person can only have a maximum of one (1) Plus (Margin) account. If you have multiple Personal Accounts, only one can be Plus. There is no limit on the number of Basic (Cash) accounts per client.

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Leverage

A Plus (Margin) account has no cost. You only pay interest if you use the loan, calculated daily based on the amount used.

• Example: For example, if you use $1,000 in loans, an annual rate of 13% applies, equivalent to approximately 0.03611% daily. This translates to about $0.36 in daily interest, or approximately $10.83 per month. Accumulated interest will be reflected in your account on the 15th of each month.
• Duration: The loan duration is indefinite. To stop using it, you can deposit funds into your account or sell positions.

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How to Use the Loan

To use the loan, the account must have a minimum capital of $2,000. Its use is not mandatory — it is simply a tool available if you choose to use it. You will start using the loan once you have invested all your available cash. We will update your account value to reflect availability or the borrowed amount.

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Am I Using the Loan?

To use leverage, you must first use all your own funds. If you have free funds, you will see it in the Cash field in your account.

If that value is positive, you are not using borrowed funds and have your own funds available to invest. If that field is negative, the value shows the amount you are currently borrowing.

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How to Stop Using Margin

If you are using borrowed funds from Folionet, you have two options to stop:

1. Deposit Funds: You can deposit additional funds from your bank account for the total (or partial) amount — the loan balance will be reduced by the amount you deposit.
2. Sell Positions: You can sell positions in your portfolio — the loan will be reduced by the total amount of the sales (including fees).

Both methods are not mutually exclusive, so you can use a combination of both: deposit funds and sell positions.

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Benefits & Risks

The use of margin entails greater sensitivity to changes in your account balance. This involves both benefits and risks.

Benefits include:

• Greater buying power: Access more investment opportunities.
• Higher return potential: If the asset rises, your gains are multiplied.
• Flexibility: You can take advantage of market movements without waiting to have more capital.
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Risks:

• Greater exposure: If the asset falls, losses are also amplified.
• Interest: Borrowed money generates interest charges, billed monthly on the 15th of each month. The interest rate may change without prior notice.
• Margin Call: If the value of your portfolio falls considerably, our custodian will require you to deposit more funds to cover your positions. If no action is taken, positions will be sold automatically at random to reduce the outstanding loan.