Trading limits explained

What is a trading limit?

Your trading limit is the maximum value of a buy order that you can place. It is calculated using a number of components and will vary depending on your cash account (whether you settle your trades using a Westpac Cash Investment Account (CIA) or other Australian bank account*), and your portfolio value. The trading limit applies to the total amount of open and/or unsettled buy trades on each trading account.

Limit Orders vs Market Orders Illustration

How is my trading limit calculated?

Your cash balance, where applicable and portfolio value are taken into consideration when calculating your trading limit.

Your Cash Balance

Westpac Cash Investment Account (CIA)

One of the major benefits of having a free Westpac Cash Investment Account (CIA) linked for settlement is that the available balance in your CIA account will automatically be added to your trading limit.

You will also enjoy access to lower brokerage and competitive interest. For more information about the features, benefits and applying for a CIA.

Trading limit

=

Weighted portfolio value 

+

Cash Investment Account balance

-

Reserved funds

+

Trading account balance

-

Open buy orders

 

 

The value applied will be the value of your CHESS sponsored holdings where different stocks may attract varying collateral weights (ranging from 0%-100%), dependent upon market capitalisation, daily turnover, liquidity and price volatility among other factors. These stocks and their weightings will be reviewed periodically.

 

This is the available funds in your linked Westpac Cash Investment Account. This figure will be your account balance less any amounts we have reserved to cover your open buy orders.

 

This is the amount reserved from your linked Westpac Cash Investment Account balance to cover your open buy orders.

 

This is the sum of all executed but unsettled buy and sell orders, as well as any amounts you have deposited directly into your trading account via BPAY or direct credit. Where the value is positive we owe you money and where the value is negative you owe us money.

 

This is the sum of all your open and unfilled buy orders in the market. This figure will be displayed as a negative value when you have open orders.

Other Australian Bank Account*

If you have any other Australian bank account linked for settlement, the balance in your cash account will not contribute towards your trading limit. You will be given a default trading allowance, which will allow you to purchase up to that amount without any upfront cash deposit. To find your default trading allowance, follow the steps under ‘Where can I find my trading limit?’ below.

*from 3 June 2023, requests to nominate a Cash account must be an approved Westpac Bank account. Approved Westpac accounts may be subject to change from time to time. Different brokerage rates may apply based on whether your nominated Cash account is an integrated or non-integrated bank account.

Trading Limit

=

Weighted portfolio value

+

Trading allowance

+

Trading account balance

-

Open buy orders

 

 

The value applied will be the value of your CHESS sponsored holdings where different stocks may attract varying collateral weights (ranging from 0%-100%), dependent upon market capitalisation, daily turnover, liquidity and price volatility among other factors. These stocks and their weightings will be reviewed periodically.

 

A default amount set by Westpac Share Trading that will allow you to place orders up to this value without any upfront cash deposit requirements.

 

This is the sum of all executed but unsettled buy and sell orders, as well as any amounts you have deposited directly into your trading account via BPAY or direct credit. Where the value is positive we owe you money and where the value is negative you owe us money.

 

This is the sum of all your open and unfilled buy orders in the market. This figure will be displayed as a negative value when you have open orders.

Your Portfolio Value

Your portfolio balance will be the weighted value of your CHESS sponsored holdings. Please note that different stocks may attract varying weights (ranging from 0%-100%). These are dependent upon market capitalisation, daily turnover, liquidity and price volatility, amongst other factors.

Margin Loan

If you have a Margin Loan account, your trading limit will be dependent on your credit limit, funds available and the LVR of the stock to be purchased. Please refer to your margin lender for further details of your borrowing capacity.

Where can I find my trading limit?

You can find your current trading limit in two locations:

  1. My Account > My Portfolio > Holdings & Accounts and click on the ‘Account Details’ tab and search for the heading “Available For Trading”
    Trading Limit on the Account Details Page
  2. Trading > Share Orders > Place Order. Your Trading Limit is located to the right of the order pad under the heading “Available For Trading”
    Trading Limit on the Place Order Page

How do I increase my trading limit?

Deposit funds into your CIA Transfer cash via BPAY directly into your trading account. Transfer holdings in from another broker

Deposit funds into your CIA prior to trading.

If you do not have a CIA, you can apply for free. There are no account opening fees or ongoing monthly account service fees, plus you can earn bonus variable interest (subject to eligibility).

To find out more and apply, navigate to Products & Services > Cash & Lending > Cash Investment Account > Open account.

The Westpac Share Trading Biller Code is 49122. Each share trading account has a unique Ref. If you have more than one account please ensure you have selected the correct trading account prior to transferring funds.

To find your BPAY details, navigate to My Account > My Portfolio > Holdings & Accounts, click on the ‘Account Details’ tab and locate the BPAY information in the right hand column.

BPAY Details

Funds take approximately 24-48 hours to clear and be available for trading.

If you hold shares with another broker, you can transfer them into your Westpac Share Trading account, which will increase the value of your portfolio. To transfer, please download the relevant Share Transfer forms under Contact & Support > Forms > Download Forms, located under ‘Administrative’.

Examples with a CIA

Diagram explaination with a CIA

Example 1

Amy has just opened her new Share Trading and CIA, and has deposited $40,000 so she can buy her first parcel of shares. Her trading limit is $40,000 which is the value of her cash balance as she doesn’t have any holdings to contribute to her portfolio value yet. She buys $25,000 worth of RIO shares. As a result, $25,000 will be reserved from her CIA and her trading limit will reduce to $15,000 for other buy orders she may wish to place.

Once Amy’s order executes, there will be no open buy orders or reserved funds to detract from, therefore her new trading limit will be $40,000 which includes her new portfolio value of $25,000 and her CIA balance of $15,000.

Example 1 with a CIA

Example 2

John’s current trading limit is $25,000 which consists of a portfolio value of $5,000 and a $20,000 balance in his CIA. He places a buy order of BHP for $8,000. As a result, an amount of $8,000 will be reserved from his CIA and his trading limit will reduce to $17,000 for other buy orders he may wish to place.

Once John’s BHP order executes, there will be no open buy orders or reserved funds to detract from, therefore his new trading limit will be $25,000 which includes his new portfolio value of $13,000 and his CIA balance of $12,000.

Example 2 with a CIA

Examples without a CIA

Diagram explaination without a CIA

Example 3

Sarah’s current trading limit is $15,000, which consists of a portfolio value of $5,000 and a default Trading Allowance of $10,000. She buys $7,000 worth of RIO shares and as a result, her trading limit will reduce to $ 8,000 for other buy orders she may wish to place.

Once Sarah’s order executes, there will be no open buy orders to detract from, therefore her new trading limit will be $22,000 which includes her new portfolio value of $12,000 and her trading allowance of $10,000.

Example 3 without a CIA

Example 4

Peter’s current trading limit is $50,000, which consists of a portfolio value of $40,000 and a default Trading Allowance of $10,000. He places two buy orders, one for $5,000 of BHP and another for $15,000 of RIO. As a result, his trading limit will reduce to $30,000 for other buy orders he may wish to place.

Once Peter’s order executes, there will be no open buy orders to detract from, therefore his new trading limit will be $70,000 which includes his new portfolio value of $60,000 and his trading allowance of $10,000.

Example 4 without a CIA
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This information is intended to provide information for educational purposes only and is subject to change at anytime without notice.