Credit shoulder - a special service of a brokerage company, which is to provide an investor to an additional cash or securities in debt so that the client can open the position. Most often, a certain additional remuneration is taken for him, in addition to the brokerage commission.
The credit shoulder increases the income of the market participant, but at the same time leads to a proportional increase in the received financial risk.
Credit shoulder when buying assets
Let's try to show it on a simple example. Suppose the client has 1 thousand rubles to which he can buy exactly ten shares if their quotation at the time of the transaction is 100 rubles per piece. A month later, the price of paper grew by 10% and amounted to 110 rubles per piece. Now the investor can sell its package for 1100 rubles and write down 100 rubles to profit.But appetite, as they say, comes while eating. Clients like getting sales profit, and broker - commissions that depend on the volume of transactions. Then the broker offers the client to strengthen its position by taking a loan in the amount of 1 to 2 from the funds available. This is a credit shoulder.
Suppose the client would agree at this at the very beginning. And then his profits from buying shares would not be 100, but 200 rubles. Suppose the client does not have fear at all, and the broker is also ready to take a chance, and provides a client with a loan 1 to 10. Then for its 1 thousand investor would have earned not 100 and not 200 rubles, and 1 thousand, that is, would double his capital in just a month .
Risk of credit shoulder
In finance, wherever there is possible profits, there is also an appropriate level of risk. Suppose in our example that the shares will not rise next month, but on the contrary, they will fall on the same amount by 10%. Then in the first version, without shoulder, the investor will lose 10% of its assets, with a shoulder of 1 to 2 already 20%, and at the shoulder 1 to 10 it will remain without money at all.
Moreover, in a situation where money will be approached by an end, the broker will have to offer an investor or bring a certain amount to ensure the fulfillment of obligations, or close the position. This situation in English is called Margin Call, literally, "the requirement to make margin, the difference." If the client does not do this in the allotted period, the broker will close the position forcibly. Most often it turns out at the worst price of possible.
Credit shoulder at short positions
In the stock market, you can not only play an increase in securities, but also on their decrease. This is done like this: take, for example, stocks, sell them, and when they cheaper, redeem back and return the owner to the previous one, having risen your profits. This is the name of the opening of short positions.At the same time, such transactions can also be carried out, with shoulder, as well as buying securities. Then in the first example considered by us, with the growth of quotations, the owner of a short position would receive a loss - at 10%, 20% or lost all the money at all.
But on the fall, bringing a loss to the buyer, he would be on the contrary earned. Exactly the same: I would receive 10, 20 and all 100% earned for the month. Yes, it is simultaneously profitable, and risky.
How much is the credit shoulder
Credit shoulder is a paid service from a broker. Although during the day it is usually provided for free. The fact is that by and large, while the trading session has not ended, it is not yet clear who how many papers or money should be needed by its results, and no movements do not occur. Therefore, this is not a gift, it is not yet for what.
But if the position remained after the end of the session, then, as they say, be kindly: the calculation between the seller and the buyer should take place in the time interval T + 2, that is, the day of trading plus two days on the final conclusion. And then the broker is already starting to charge the credit shoulder fee, which is most often indicated in the tariffs.
Essentially for example, other brokers are different, there are conditions and better, and worse, and they change at any time, like any interest rates. These options suggests at the beginning of 2021 VTB: a loan in rubles 16.8 percent, in US dollars 4.5%, in euro 2%. In fact, this is not enough if we take into account that the return of debt is fully secured by the investor securities, which can be sold at any per minute if the broker only encourages that the client may not have enough funds.
As a rule, the loan in money costs about as much as a loan in the same bank. And "intercepting" paper for their short sale is somewhat cheaper.
Of course, no one hides that these are the same client paper, to dispose of which the investors themselves allow the broker, signing the contract or joining the regulations. So the broker, if you call things with your own names, it just additionally earns a little on customer remnants.
At the same time, by the way, it is necessary to understand that not always and not any valuable paper can be occupied by a broker. It can simply not be in presence.
Is it worth using a credit shoulder
Is it worth using a credit shoulder and what is a personal matter, depending on the desire of the investor, get higher income by increasing the risk taken. But at the same time, it is necessary to understand that, for example, if the loan costs, for an example, 10 percent per annum, it is necessary that the action bought on it has risen in price for the same year on more than 10 percent to get at least some profit .
The cheaper option to make money at the expense of risk, and much, if you compare with shares - to participate in the auction of the Term Market section, performing operations with futures for the same securities. There, the tools are arranged in such a way that you do not need to pay for a loan, and the Commission is below. But on the other hand, for non-professionals it is the most direct way to lose all its savings.