Portfolio concentration
Lower LTVs are applied to positions that make up 25% or more of your holdings (this doesn't include any available cash). These restrictions apply because borrowing against an undiversified portfolio carries higher risk. When your portfolio is concentrated, your maximum portfolio LTV is reduced.
Concentration thresholds
|
Position size (% of portfolio) |
Concentration LTV |
|
Under 24.99% |
75% |
|
25%–34.99% |
65% |
|
35%–49.99% |
60% |
|
50% or more |
50% |
Example:
|
Symbol |
Position Value |
Portfolio % |
LTV |
Max Borrow |
Concentration LTV% |
Concentration Max Borrow |
|
ABC |
$50,000 |
50% |
75% |
$37,500 |
50% |
$25,000 |
|
XYZ |
$35,000 |
35% |
75% |
$26,250 |
65% |
$22,750 |
|
DEF |
$15,000 |
15% |
75% |
$11,250 |
75% |
$11,250 |
|
Total |
$100,000 |
100% |
75% |
$ 75,000 |
59% |
$59,000 |
To prevent concentration requirements from being applied to your account, keep your portfolio diversified.